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Industry analysis is defined as an assessment tool designed to offer business entity a comprehensive idea about the complex nature of a specific industry. It includes reviewing the market, political, and economic factors that have a direct impact on the development of an industry.

An industry analysis consists of three major elements: the underlying forces at work in the industry; the overall attractiveness of the industry; and the critical factors that determine a company's success within the industry.

Industry analysis, for an entrepreneur or a company, is a method that helps to understand a company's position relative to other participants in the industry. It helps them to identify both the opportunities and threats coming their way and gives them a strong idea of the present and future scenario of the industry.

Post sales and Earnings performance: The historical performance of sales and earnings should be given due consideration, to know how the industry have reacted in the past. Nature of Competition: The top firms in the industry must be analyzed.

Step 1: Give a brief overview of the industry. Step 2: Review trends and growth patterns that have existed within the industry. Step 3: Identify factors that influence the industry. Step 4: Using data gathered through research, the industry forecast anticipated growth.

Understand the Importance of an Industry Analysis. Use Industry Research to Learn the History. Review Total Sales Numbers and Trends in Sales Volume. Look at the Key Financial Measures of Your Industry. Research the Major Players in the Industry. Understand Who Your Direct Competitors Are.

A Broad Factors Analysis assesses and summarizes the four macro-environmental factors political, economic, socio-demographic (social), and technological. These factors have significant impacts on a business's operating environment, posing opportunities and threats to the company and all of its competitors.

Industry Analysis Checklist

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