What is Industry Analysis
Clarke Ricks
School of Business, Liberty University
BUSI 690: Policy and Strategy in Global Competition
Dr. Hicks
April 6, 2022
What is Industry 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, e.g., 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.
Industry analysis, for an entrepreneur or a company, is a method that helps to
understand a company’s 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. The key to surviving in this ever-
changing business environment is to understand the differences between yourself and your
competitors in the industry and use it to your full advantage
Types of industry analysis
There are three commonly used and important methods of performing industry
analysis. The three methods are:
1. Competitive Forces Model (Porter’s 5 Forces)
2. Broad Factors Analysis (PEST Analysis)
3. SWOT Analysis
#1 Competitive Forces Model (Porter’s 5 Forces)
One of the most famous models ever developed for industry analysis, famously known
as Porter’s 5 Forces, was introduced by Michael Porter in his 1980 book “Competitive
Strategy: Techniques for Analyzing Industries and Competitors.”
