Zafra Emanuel A.

BSBA 3B
Ms. Jeng Porte

Industry Analysis: Positioning the firm in a Specific Environment

Industry analysis is a vital tool that facilitates a company's understanding of its position
relative to other companies that produce similar products or services. Understanding
the forces at work in the overall industry is an important component of effective
strategic planning. Further, industry analysis enables small business owners to identify
the threats and opportunities facing their businesses, and to focus their resources on
developing unique capabilities that could lead to a competitive advantage.
Understanding the industry directly impacts the ability to succeed. Understanding the
industry and anticipating its future trends and directions gives the knowledge that is
needed to react and control the portion of that industry.
Since both you and your competitors are in the same industry, the key is in finding the
differing abilities between you and the competition in dealing with the industry forces
that impact you. If you can identify abilities you have that are superior to competitors,
you can use that ability to establish a competitive advantage.
Industry analysis can help you create long-term strategies, see threats before they
reach you and discover opportunities before they pass you by. Your analysis is relative,
so compare yourself to competitors and the rest of your industry to figure out how each
of you deals with the forces in your industry.
Industry analysis is an important step in the business decision-making process. An
industry analysis covers history, overview, competitive structure, major markets, supply
chain, technology, major players, regulations, critical success factors and outlook.
Industry reports summarize an industry including both weaknesses and strengths. In
contrast to general reports, a specific industry analysis focuses on just one issue, such
as growth.
Industry analysis is also significant in helping a company understand its position relative
to companies that produce similar products or services, the online site Reference for
Business states. Better understanding leads to more informed and better quality
business decisions. This knowledge points out threats and opportunities that could lead
to the downfall or increased growth of your business, so this understanding is an
important part of both long-term and short-term planning.
The process of industry analysis starts with investigating secondary sources, follows
with primary sources, and organizes the information in a report. Secondary sources
include databases, industry publications, trade magazines and newspapers, and focuses
on broad strokes of information. Primary sources consist of industry professionals and
customers interviewed directly or via questionnaires for more detailed and specific
information.