Industry / Market Analysis

Whether you are starting a new business or entering a new market, you must have a robust market analysis which considers a wide range of complex factors. Not least of these are competition, market dynamics, and the economic assumptions underpinning a strategy. Without a detailed understanding of the market and competition, any launch is bound to struggle. We produce the best results for clients by providing them deep understanding of market with clear understanding of their differentiation and strategy for succeeding in the market. We combine our advanced technical resources with commercial awareness based on our in-depth experience of specific industry. Our specialists, whilst offering leading-edge market research skills, also understand the commercial imperatives that drive business success. This unique combination of capabilities helps us analyze business impact of new technologies and innovations.

A strong market analysis requires going beyond gut feeling. It requires supporting your idea with fact-based market research. All industry analysis require careful attention to the following:

  • Market Analysis: To make this section robust, we help you identify industry size, growth rates, drivers, challenges, major players, and market forecasts and emerging trends.
  • Competitive Analysis: Understanding your competition is critical to your success. This section includes an analysis of your key competitors, their products / services, their differentiators, and market shares.
  • Target Market and Customers: Identifying and prioritizing specific target markets are another key part of your industry analysis where research is crucial. You need to think about demographics and buying behaviors of your customers? How can you best reach them? What kinds of challenges do they have? How do they like to be marketed?

Below are some of the elements we cover in various aspects of industry analysis.

Background and Current Status of the Industry

  • Carefully define the industry. Are you describing an industry or a segment in that industry. or are you defining just a stage in the industry.
  • Describe the size of the industry in dollars of sales per year. What has been the trend in the size of the industry in recent years?
  • What is the growth forecast for the industry?
  • Describe the historic profitability of the industry. and of the industry segments (such as production, processing, manufacturing).
  • Describe the stage of the product life cycle of the industry’s product(s) (rapid growth, mature, etc.).
  • For processing and manufacturing industries, list the total processing capacity and the amount of processing capacity being used. Show this for the current period and previous years.
  • List and describe inventory (unsold product) levels in the industry. Do this for the current period and previous years.
  • Describe any developments or problems the industry is experiencing.
  • Is the industry dominated by supply chains or open markets?
  • Which parts of the supply chain are commodities and which are differentiated products?
  • Describe the supply chain relationships that may exist in this industry and describe the role of the business within the supply chain.
  • How do participants create or extract value at different points in the supply chain?
  • Describe how distribution works in the industry (for example direct sales to customers or sales force, retail, wholesale)?
  • If targeting a niche market, identify the relevant industry segments and how they are defined.

Product Usage

  • Describe the product(s) being produced by the industry.
  • What are the overall consumption trends of the product(s)?
  • Describe the per capita (per person) consumption trends.
  • Describe usage by specific markets (for example polyester resin usage in the automotive market).

Prices

  • Provide data on the current price levels in the industry and price levels over previous years. This includes prices for final products, intermediate products in the supply chain and raw materials.
  • Provide data on the profit margins for the various segments of the industry segments.

Competitiveness

  • Industry concentration – This is a measure of the number of firms in an industry and the size of the predominant firms in the industry. It indicates the nature of the competition.
    • Identify the most important players in the industry.
    • What percent of the market is controlled by the largest companies (for example, the four largest firms)?
    • What is the market share of each major firm?
    • What is the number of firms over a certain size?
    • Is there a dominant industry leader? Who is it?
  • Competition from other products – The more similar a competitive product is to a product, the more competitive it will be. Branding is an effort to differentiate one product from competitive products in the eyes of the consumer.
  • Barriers to entry/ease of entry – Is the industry easy or difficult to enter? If entry is easy, competitors enter the market during periods of high profitability and expand production capacity. This drives down prices and profit margins. Barriers to entry make it more difficult for competitors to enter so profit margins remain favorable. Barriers to entry include the following:
    • Limited access to markets – If the market is dominated by well established branded products, a new entrant will need to spend the time, money and effort to establish a successful branded product.
    • Large-scale production – If large scale production requires substantial financial investment, the financial requirements will be to limit entry.
    • Limited access to technology or production processes – Patented technology and other intellectual property will limit entry.
  • Concentration within the supply chain – When many firms buy from or sell to a few firms, the segment with the highest concentration (fewest firms) usually has an advantage. What is the relative concentration of input suppliers, producers, processors, etc.? Industry rivalry – Describe the intensity of the rivalry among industry participants.

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