Understanding the market and industry in which your company will do business is accomplished through an industry analysis.An industry analysis conducted before you begin to write a business plan will help you to: An industry analysis is specific to the particular industry in which a business is currently operating or into which it plans to venture.A product feature comparison allows you to compare your company’s product with products produced by competitors.
A random conversation with a supplier might reveal information about a change in a competitor’s product line.
The point is to take advantage of every opportunity to acquire data about the marketplace in which your business operates, and it might reveal something about your competitors that could be of use in developing or refining your marketing strategy.
According to Porter, there are five forces that influence all markets and industries.
The five forces are: Porter believed that an analysis of the five forces that exist in every industry could help forecast a company’s ability to compete and remain profitable.
If the features of the competing product give it a performance advantage over your own, you can evaluate how important those features are to determine if your product should be redesigned.
Another source of information on the product is the internet.
Financing, marketing strategy and future growth all require a well-researched and thought out business plan.
There are many articles and resources available on the Internet explaining how to write a business plan, but writing a business plan is more than merely following a business plan template or copying someone’s business plan examples.
You should be able to answer the following key questions about the industry and your company’s ability to successfully compete in it when you have completed the industry analysis: An industry analysis is not to be confused with a market analysis or a competitor analysis, both of which are included in a business plan for entrepreneurs.
An industry analysis will describe the products offered within a particular industry and the parameters of the marketplace in relationship to economic, regulatory and political issues.