What are the benefits of conducting industry research?
Industry research can help you assess your company's position in the industry in comparison to its rivals. You may discover what external and internal factors are acting for and against your company's profitability and expansion by understanding how to conduct an industry analysis. Here we will explain what an industry analysis is.
What is Industry Analysis?
Industry analysis can be defined as the market evaluation method used by companies and entrepreneurs to evaluate how their competitors or potential rivals are doing in the industry. Industry studies go well beyond standard market research to explain how each element of a business connects to its competitors or industrial trends. The purpose of these analyses is to identify how to fight with the greatest firms in your field while achieving the profits you want.
Industry studies can be conducted independently or as part of a business strategy by large and small organizations ranging from retail to manufacturing. As markets can shift rapidly, previous industry studies can become outdated in a matter of days or weeks.
What is the Importance of Industry Analysis in a Business?
Organizations must do an industry analysis to determine how market factors impact their operations. Even though industry analyses are contextual and thus do not always ensure success, they can offer a foundation for making insightful business and market judgments. These kinds of evaluations can be beneficial:
- Learn about present and past industry trends.
- Predicts supply and demand reports
- Estimate a company's prospective financial returns.
- Demonstrate the competitiveness of a specific industry.
- Determine the industry's present situation, especially growth or market saturation.
- Entrepreneurs can learn about the latest opportunities and niche markets.
- Display a company's financial situation.
- Demonstrate the advantages of investment to stakeholders.
- Make suggestions or take corrective steps for future planning.
How you Can Conduct Market Analysis?
How to Conduct an Industry Analysis for Your Business
Follow these key steps to effectively perform an industry study for your existing or potential business:
1. Collect Relevant Data
Begin by gathering information that can help you answer questions about your market and competitors. Review the latest industry analysis reports—both internal and external—to understand current trends. Analyze your competitors’ marketing strategies, product placements, advertising, and public financial records to gain insights into their profitability and target audiences. Make use of secondary sources such as government statistics, industry reports, and scholarly articles for additional context and supporting data.
2. Prepare Your Industry Report
Organize your findings in a written report to make them clear and shareable. Using a structured template can help. Your report should include:
Introduction: Provide an overview of the industry, competitors, historical data, and emerging trends.
Objective: Clearly state the purpose of the analysis and any key questions it aims to answer.
Data Presentation: Use written explanations, charts, and graphs to present the data you've gathered.
Analysis: Discuss your observations and address the objectives you outlined.
Forecast: Outline the short-term and long-term implications of your findings for the business, including potential challenges.
Summary: Wrap up the report with a brief summary (four to five lines) of the key takeaways.
3. Assess Your Business
Use your report particularly the analysis section—to guide business decisions. For instance, if your study shows that a competitor is growing at a rate of 12% annually, you can use this insight to strategize ways to outperform them. If questions remain after your initial analysis, consider conducting further, more focused research.
4. Interpret and Compare the Data
Utilize recognized industry analysis models (like SWOT, Porter’s Five Forces, or PESTLE) to interpret the data. This helps you compare your products, marketing efforts, and capabilities against those of your competitors and identify areas where you can improve or innovate.
5. Conduct Background Research
To build a thorough understanding of your industry, carry out extensive background research on both the sector and your competitors. Decide whether your focus will be on the entire industry or a specific segment. Identify the key questions your research should answer such as market behavior, growth potential, or industry best practices. Create a list of key competitors and explore opportunities to learn more about their operations and strategies.
What are the Different Types of Industry Analysis?
The sort of industry analysis you select may be determined by your research topic or intended results. Several different types of industry analysis might be quantitative (applying mathematical predictions to examine data) or qualitative (employing experience and subjective judgment to analyze data). Three common types of industry analysis are:
SWOT Analysis
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This analytical framework highlights four key internal and external factors that directly influence a business. It is typically used to evaluate a single company's strategic position. However, if you wish to compare your business with a competitor, you can conduct separate SWOT analyses for each organization.
Competitive Forces Model
The Competitive Forces Model, also known as Porter’s Five Forces, is one of the most widely used methods for industry analysis. Developed by business strategist Michael Porter, this model focuses on five external forces that affect the competitive environment of an industry, rather than just the actions of individual competitors.
Broad Factor Analysis (PEST Analysis)
The Broad Factor Analysis, commonly referred to as PEST Analysis, examines four major external factors that may impact a company’s market standing. These include Political, Economic, Social, and Technological influences. This approach helps businesses understand the broader macro-environment in which they operate.
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Aparna Dutta /
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Hello, I am a content writer with 3.5 years of experience. I have experience in various fields of content writing. For example, I have worked in a market research organization where I had to write content related to the reports that the company used to generate to improve their Google ranking. Other than that, I have also worked in website content as well as technical content for print and digital media magazines. Apart from this I am very flexible as a person and can adjust easily.
