SECURITY ANALYSIS/ INDUSTRY ANALYSIS

is a market assessment tool used by businesses and analysts to understand

the competitive dynamics of an industry. It helps them get a sense of what is happening in

an industry, i.e., demand-supply statistics, degree of competition within the industry, state

of competition of the industry with other emerging industries, future prospects of the

industry taking into account technological changes, credit system within the industry, and

the influence of external factors on the industry.

for an entrepreneur or a company, is a method that helps it to understand

its 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.

as a form of market assessment, is crucial because it helps a business

understand market conditions. It helps them forecast demand and supply and consequently,

financial returns from the business. It indicates the competitiveness of the industry and costs

associated with entering and exiting the industry.

With a very detailed study of the industry, entrepreneurs can get a stronghold on the operations

of the industry and may discover untapped opportunities. It is also important to understand that

industry analysis is a very subjective method and does not always guarantee success.

There are three commonly used and important methods of performing industry analysis.

The three methods are:

One of the most famous models ever developed for industry analysis, gives an accurate impression of the industry

and makes analysis easier.

What does porter's 5 forces model analyze?

What are the five forces in porter's model?

The number of participants in the industry and their respective market shares are a direct

representation of the competitiveness of the industry.

This indicates the ease with which new firms can enter the market of a particular industry.

If it is easy to enter an industry, companies face the constant risk of new competitors. If the

entry is difficult, whichever company enjoys little competitive advantage reaps the benefits

for a longer period. Also, under difficult entry circumstances, companies face a constant set

of competitors.