Industry analysis

Industry analysis is a market assessment tool used

by businesses and analysts to understand the
competitive dynamics of an industry. It helps them
get a sense of what is happening in an industry. It
guides the industry to grow and survive in a
competitive environment and gain a competitive
edge in the industry as it predicts the future and changes in the market. It analyzes the threats
and opportunities in the way ahead and making decisions and planning accordingly. Analysis
of the industrial condition is typically done by keeping in mind market size, technological
advancement, changes in rules and regulations, the objective of the company, etc.

Industry analysis is useful for:

 Understanding a company’s business and business environment.

 Identifying active equity investment opportunities.
 Formulating an industry or sector rotation strategy
 Portfolio performance attribution.

Methods of industry analysis

 Competitive Forces Model (Porter’s 5 Forces)

 Broad Factors Analysis (PEST Analysis)
 SWOT Analysis

How to do the industry analysis:

 Review the available information: Review available reports, white papers,

analyses, research reports, and presentations to get to know about the industry.
Identify the key factors that will help to analyze the industry.
 Get an idea about the right industry: Get an idea about the proper industry if
it has sub industries. Identify the right industry to analyze the performance. This will
help to get the accurate data.
 Forecast future demand and supply: This is the key thing in any industry.
Because everything depends on the demand and supply of the industry. Find out the
 financial health of each competitor. Then take account of the growth rate and the
products they’re selling in the last five years. Then do a comparative analysis with
your business. This will recognize the key factors that are responsible for future
demand and supply in the market.
 Competition Analysis: Analyze the competition in the market. And take the
required decisions to stand out in the market. Make the strategies based on the market
condition which will help to sustain in the market.

Brands under Automobile Industry:

 Toyota,
 Volkswagen,
 Daimler,
 Ford,
 Honda,

Swot analysis of Automobile industry:

Contribution of Automobile Industry to GDP

The automotive industry in India is one of the main pillars of the economy. The increase in
demand for cars, and other vehicles, powered by the increase in the income is the primary
growth driver of the automobile industry in India. With strong backward and forward
linkages, it is a key driver of growth. The contribution of this sector to the National GDP has
risen to about 7.1% now. Due to COVID-19, a slight fall by 0.5% was observed in GDP growth. It
provides direct and indirect employment to over 50 million people. India aims to double its
auto industry size to ₹15 lakh crores by 2024. In terms of global rankings in manufacturing
output, it is 2nd largest in two-wheelers, 7th largest in commercial vehicles, sixth largest in
passenger vehicles and the largest in tractors. Automobile Sector occupies a prominent place
in the fabric of Indian Economy. Automobile sector is leader in product and process
technologies in the manufacturing sector. The growth for automotive industry is important for
growth in economy, particularly because the automotive industry has strong multiplier effect.
There is a symbiotic relationship between the growth of economy and the demand for
vehicles.

Conclusion:

Industry analysis enables a company to develop a competitive strategy that best defends
against the competitive forces or influences them in its favor. It provides businesses with a
comprehensive understanding of the industry's current state, emerging trends, competition,
and regulatory environment. A thorough industry analysis helps businesses identify
opportunities, mitigate risks, make strategic decisions, and stay ahead of the competition. As
such, it is an essential tool for businesses seeking to gain a competitive edge and increase
their profitability. Automobile industry plays a vital role in the fabric of Indian economy. This
sector of industry has made a rapid & steady growth in India.