Conducting an industry analysis is usually easy because market reports for industries are readily available. If you are planning to sell cheese, do a Google search on “cheese market report,” and you’ll find several documents. Find out the industry’s size, how it is segmented, and who the big players are. An industry analysis confirms the existence of a strategic opportunity.
There are three commonly used and important methods of performing industry analysis. The three methods are:
Competitive Forces Model (Porter’s 5 Forces)
Broad Factors Analysis (PEST Analysis)
SWOT Analysis
Competitive Forces Model (Porter’s 5 Forces)
Is there are a large number of competitors in your industry?
Are there a lot of barriers to entry in the industry?
How powerful are the suppliers?
How powerful are the customers?
Are there substitute products and services?
Broad Factors Analysis (PEST Analysis)
How likely is this industry to be impacted by government policy and changes in legislation?
Is this industry sensitive to exchange rates, economic growth, inflation, supply, demand, or recessions?
Does this industry depend on demographics, age distribution, and social trends?
Is this industry dependent on technology and at risk if technologies change?
SWOT Analysis
SWOT analysis is a great way to understand where you stand in terms of your competition.
What are your strengths compared with others within this industry?
What are your weaknesses when compared to others in this industry?
What opportunities do you see for yourself within the industry?
What are the possible threats to succeeding in this industry?
For more, consider the following link:
https://corporatefinanceinstitute.com/resources/knowledge/strategy/industry-analysis-methods/