INDUSTRY

ANALYSIS
GROUP 5
GROUP 5

DIEGO DA SILVA (LEADER)

VON DAVE BADILLO

MIGUEL ANGELO VALLEGA
CARL KENJE SORIANO
ERWIN JOSHUA HIMAN
ROWEL DOLLENTE
DANIEL DONAYRE
SUMMARY

• DEFINITION
• INDUSTRY LIFE CYCLE
• EXPANSION
• STAGNATION
• DECLINE STAGE
• HEARING STAGE
• TIME SERIES
An industry analysis is a marketing process that
provides statistics about the market potential of your
business products and services. This section of your
plan needs to have specific information about the
current state of the industry, and its target markets.
Industry Life Cycle
 Industry Life Cycle Phases

The introduction, or startup, phase involves the

development and early marketing of a new
product or service. Innovators often create new
businesses to enable the production and
proliferation of the new offering. Information on
the products and industry participants are often
limited, so demand tends to be unclear.
Consumers of the goods and services need to
learn more about them, while the new providers
are still developing and honing the offering. The
industry tends to be highly fragmented in this
stage. Participants tend to be unprofitable
because expenses are incurred to develop and
market the offering while revenues are still low.
 Industry Life Cycle Phases

Growth Phase
Consumers in the new industry have come to
understand the value of the new offering, and demand
grows rapidly. A handful of important players usually
become apparent, and they compete to establish a
share of the new market. Immediate profits usually are
not a top priority as companies spend on research and
development or marketing. Business processes are
improved, and geographical expansion is common.
Once the new product has demonstrated viability, larger
companies in adjacent industries tend to enter the
market through acquisitions or internal development.
 Industry Life Cycle Phases

Maturity Phase
The maturity phase begins with a shakeout period,
during which growth slows, focus shifts toward
expense reduction, and consolidation occurs. Some
firms achieve economies of scale, hampering the
sustainability of smaller competitors. As maturity is
achieved, barriers to entry become higher, and the
competitive landscape becomes more clear. Market
share, cash flow, and profitability become the primary
goals of the remaining companies now that growth is
relatively less important. Price competition becomes
much more relevant as product differentiation declines
with consolidation.
 Industry Life Cycle Phases

Decline Phase
The decline phase marks the end of an industry's
ability to support growth. Obsolescence and evolving end
markets negatively impact demand, leading to declining
revenues. This creates margin pressure, forcing weaker
competitors out of the industry. Further consolidation is
common as participants seek synergies and further gains
from scale. Decline often signals the end of viability for
the incumbent business model, pushing industry
participants into adjacent markets. The decline phase
can be delayed with large-scale product improvements or
repurposing, but these tend to prolong the same
process.
What is the Industry Life Cycle?
Industries, like products and businesses, emerge and eventually decline at specific points in history; the
time period between inception and eventual extinction (if applicable) is the industry’s life cycle.

Understanding where an industry is in its life cycle is important for financial analysts, entrepreneurs, and
other stakeholders when seeking to assess the competitive landscape and a company’s ability to grow,
generate profits, and produce free cash flow.

The industry life cycle begins with a launch stage and ends with decline.

Key Highlights
● The industry life cycle describes how an industry begins, evolves, and eventually declines.
● The main stages are launch, growth, shakeout, maturity, and decline.
● The industry life cycle framework can also be applied to technology or service offerings (not just
“industries,” specifically).
Life Cycle Considerations
What’s interesting about the industry life cycle is that it applies more broadly than to just
“industries” (in terms of the technical definition of what an industry is).

The life cycle concept can also apply to technology categories. For example, generative AI
isn’t really an industry (per NAICS or NACE), but it’s demonstrating industry-like
characteristics.

It’s currently somewhere between the launch and early growth stage; companies are
investing heavily in potential use cases and new opportunities for commercialization.
Industry Life Cycle: The Bottom Line
There are great opportunities to deploy capital into businesses operating at all stages of an
industry’s life cycle. However, the nature of opportunities depend largely on the risk/return
profile of the investor (or creditor).

For example, a senior lender (like a commercial banker) will be most comfortable with
later growth and mature industries. Venture capital investors, on the other hand, will invest
only in businesses in the launch or early growth stages.

Understanding where a firm fits into its industry, and how that industry’s life cycle may
create risks or opportunities for that management team is paramount in really
understanding a business.
WHAT IS EXPANSION IN BUSINESS

 Business expansion refers to the growth of a business to a stage

at which it seeks out additional options to generate more profit.
TYPES OF EXPANSION:

• MARKET EXPANSION
• FRANCHISING
• STRATEGIC PARTNERSHIP
• ONLINE EXPANSION
MARKET EXPANSION

 Market expansion is about expanding a product or

service to new geographic regions or tapping into new
customer segments within existing markets.
 By expanding into new territories, businesses put
themselves in front of more potential customers, which
means increased market penetration and brand-building
opportunities.
FRANCHISING

 In a franchise establishment, a brand permits another

individual or entity to use its name and established
business model to open an independent establishment.
STRATEGIC PARTNERSHIP

 Strategic partnerships are collaborative relationships

between two or more like-minded organizations that
work in synergy to achieve common objectives. These
partnerships are usually formed to use each other’s
resources, expertise, and knowledge to create new
opportunities and achieve goals neither could
accomplish alone.
ONLINE EXPANSION

 Customer expectations, advancements in digital

technology, and marketplace demand have made online
expansion increasingly important to stay ahead of the
competition.
FACTORS TO CONSIDER WHEN
EXPANDING A BUSINESS

 MARKET RESEARCH
 FINANCIAL ANALYSIS
 MANAGEMENT CAPABILITIES
CHALLENGES AND RISK OF BUSINESS EXPANSION

FINANCIAL RISK
 Financial risk is the possibility of losing money on an
investment or business venture.
LEGAL RISK
 Legal risks can threaten businesses expanding to new markets,
from intellectual property disputes to compliance issues and
other legal challenges.

REPUTATIONAL RISK
 Reputational risk is a threat or danger to the good name or
standing of a business or entity. These reputational risk scenarios
are caused by direct actions of your company and company
practices.
STAGNATION

• Entrepreneurship promotes economic growth, provides

access to goods and services, and improves the overall
standard of living.
STAGNATION meaning

• the state of not flowing or moving.

• lack of activity, growth, or development.
Stagnation occurs within an economy when total output is
either declining, flat, or growing slowly. Persistent
unemployment, flat job growth, no wage increases, and an
absence of stock market booms or highs are evidence of
stagnation. As economies cycle through periods of
recession to growth or from growth to recession, they may
experience a time of stagnation.
Cyclical Stagnation

• Stagnation can occur as a temporary condition in the

course of an economic cycle or business cycle as a
recession is ending and recovery is beginning. During
these periods, both monetary policies and fiscal
policies may be implemented to avoid prolonged
stagnation.
•
Economic Shocks

• Specific events or economic shocks can induce periods

of stagnation which may be short-lived or have lasting
effects, depending on the specific events and the
resilience of the economy.
The 4 Stages of Business Growth & Decay
Startup Phase:

Characteristics: This is the initial stage where the business is just

starting. It involves developing the business idea, conducting
market research, and creating a business plan.
Challenges: High uncertainty, limited customer base, and financial
challenges.
Focus: Establishing a market presence, attracting initial customers,
and securing funding.
Growth Phase:

Characteristics: In this stage, the business experiences rapid

expansion. There is an increase in customer base, revenue, and
often a need for additional resources.
Challenges: Managing increased demand, scaling operations, and
maintaining the initial entrepreneurial spirit.
Focus: Scaling production, building brand awareness, and
expanding market share.
Maturity Phase:

Characteristics: The business has achieved stability, and growth

slows down. It often has a well-established customer base and
market presence.
Challenges: Intense competition, market saturation, and potential
stagnation.
Focus: Enhancing efficiency, diversifying products/services, and
maintaining customer loyalty.
Decline Phase:

Characteristics: The business experiences a decline in sales,

profits, and overall performance. This can result from various
factors such as changes in consumer preferences, increased
competition, or outdated products/services.
Challenges: Identifying the cause of decline, adapting to changing
market conditions, and deciding on a strategy for the future.
Focus: Business restructuring, innovation, or exit strategies, which
could include mergers, acquisitions, or closure.
The hearing stage
-It is also known as the **feedback stage** or **listening stage**, is a crucial phase in
gathering information about an industry and its stakeholders.
-This stage involves actively listening to the voices of various industry participants, including
customers, competitors, suppliers, and industry experts.
Key objectives of
the hearing stage:
1. **Gather customer feedback:**
• Understanding customer needs, preferences, and pain points is essential for identifying
market opportunities and developing products or services

2. **Assess competitive landscape:**

• Analyzing the strategies, strengths, and weaknesses of competitors provides a clearer
picture of the industry's competitive dynamics and potential threats.
3. **Identify supplier relationships:**
• Understanding the supply chain and supplier relationships can reveal potential
bottlenecks or opportunities for cost optimization.

4. **Gain expert insights:**

• Consulting with industry experts, analysts, and consultants can provide valuable
insights into industry trends, regulatory changes, and technological advancements.
Methods for conducting the
hearing stage:
1. **Customer surveys and focus groups:**

• Gathering quantitative and qualitative data from

customers through surveys and focus groups can
provide insights into their preferences, satisfaction
levels, and unmet needs.
2. **Competitor analysis:**
• Conducting in-depth research on competitors' products, services, marketing
strategies, and financial performance can reveal their strengths, weaknesses,
and potential threats.

3. **Supplier interviews and surveys:**

• Understanding the capabilities, pricing, and reliability of suppliers can help
identify potential risks and opportunities in the supply chain.
4. **Industry conferences and events:**
• Attending industry conferences and events provides opportunities to network with
industry experts, gather insights from presentations, and identify emerging trends.

5. **Industry publications and research reports:**

• Staying up-to-date with industry news, publications, and research reports can provide
valuable insights into current trends, challenges, and future opportunities.
By effectively conducting the hearing stage,
industry analysts can gain a comprehensive
understanding of the industry's dynamics,
identify potential opportunities and threats,
and make informed decisions about market
strategies and business investments.
DATA
COLLECTING DATA
 AVERAGE
MONTHLY TEMP. WEEKLY
INTRUDING OF
CHINESE IN WPS

HOURLY ENERGY
CONSUMTION
DAILY GAS HEIGHT
ANUALLY PROFIT
TIME SERIES
 EVENTS

METRICS
 EVENTS

METRICS