Download Article
Download Article
An industry analysis report is a document that evaluates a given industry and the companies involved in it. Often included as part of a business plan, an industry analysis report seeks to establish how your company can gain an advantage in an industry by understanding the industry’s history, trends, competitors, products, and customer bases. In addition, this type of report allows investors, bankers, customers to understand the makeup of an industry. After conducting research and establishing an organizational framework for your report, you’ll be prepared to write.
Steps
Industry Analysis Report Template and Example
-
Define the scope of your analysis. You might examine the industry as a whole or an industry segment which targets a particular subset of the general market. For example, you could be investigating the petrochemical industry as a whole, or a narrower niche, like US petroleum refineries. In either case, you’ll need to identify the companies that offer services or products similar to those which your company offers. [1] X Research source
- You might also need to conduct some cross-industry research. For example, a game developer may need to compile statistics on the console gaming market, PC gaming market, and handheld gaming market.
-
Research your industry with independent government agencies. Government databases contain huge volumes of statistical information on various economic sectors. Some of the best government sources in the United States for industry statistics include the Market and Industry Analysis Statistics published by the United States Census, the Department of the Treasury, FedStats.gov, EconomicIndicators.gov, and the Food and Drug Administration. All publish useful reports and statistics. [2] X Research source
- For other countries, consult federal databases and agencies within your nation, or conduct an internet search with keywords like “government statistics [name of your industry]” to locate relevant information.
Advertisement -
Compile independent research. At least two independent research reports with data on your market should be consulted. Contact private data-collection agencies or industry interest groups for a published report or market analysis relevant to your research. [3] X Research source
- You can also consult experts within your own company. Just bear in mind that their views may be biased or unreliable.
-
Look at trade association data. There may be more than one trade association for your industry. For instance, if you’re in the computer industry, you might consult or request recent industry-wide reports from the Computer & Communications Industry Association, the Association for Interactive Marketing, or the Information Systems Security Association. Whatever your industry, consult trade groups and industry publications to identify info which can provide background info on your industry analysis. [4] X Research source
-
Consult academic research. Check academic databases such as Google Scholar for published studies on your area of interest. The Encyclopedia of Emerging Industries and the Encyclopedia of American Industries, both published by Gale Research, are also good sources.
-
Compile relevant data using the sources above. Make special note of annual revenues in the industry, number of involved companies, workforce statistics, etc. Find statistics about the size of the customer base and buying trends. Cross-check your information against other sources to ensure accuracy. Your industry analysis will be examined thoroughly when you present the final business proposal to investors or stockholders, so ensure your data is solid and sourced properly. [5] X Research source
Advertisement
-
Demonstrate there is an ample market for your business proposal. To do this, you’ll need to know the relevant market size. The relevant market size is the company’s potential sales if it were to capture the entirety of its market niche. For instance, if you’re selling electric cars, your relevant market size is not all automobile drivers, or all people in the world who travel distances which make driving desirable, but rather the total of all electric car sales in a given year. [6] X Research source
- Be sure to carefully analyze any underlying assumptions that your market analysis relies upon. This is particular important for a new product or a product that is undergoing rapid acceptance.
- Relevant market sizes should be calculated in both dollar amount and unit amount. In the foregoing example, the relevant market size might be $200 million per year, or 30,000 electric cars.
-
Consider industry trends. Ask important questions which will help you consider industry trends up through the present. You should consider the impacts of globalization and technological innovation in addition to the more obvious factors like competition from other companies and consumer preferences. Regulatory conditions and the state of the economy at the global, national, and local levels should also be taken into account. Other questions to think about include: [7] X Research source
- How has the market size changed in the past year? the past five years? the past ten years?
- What is the expected growth of the relevant market?
- What factors will affect market growth? Are new demographics affecting the market? Are demographics changing?
-
Think about barriers to entry or expansion. [8] X Research source Barriers might be in the form of market competition, but it could also manifest as a lack of money or talent, or as restrictive regulations and patents. If you’re going into or expanding a microchip production line, for instance, you’re going to need several million dollars in equipment and machinery. On top of that, you’ll need computer engineers and programmers to produce and design the chips. Other firms will be competing not only for your customers, but for your employees as well. All of these are things to consider when addressing barriers to entry.
-
Provide descriptions of the major competitors in the industry. [9] X Research source Use statistical information about their revenues, work force strengths, and products in detail. Indicate their past business moves, their forthcoming products, and their marketing strategies. Include sourcing, manufacturing, and regulatory analyses. The company analysis should be as complete as possible; competitive advantages or disadvantages can arise from anywhere.
- Does your competition engage in billboard, radio, TV, internet, or print ads? How many of each kind are effective? Address whether or not your company could meet or compete with their level of marketing.
- Think about recent innovations or mistakes the competition has made. Learn from their failures, and improve on their successes.
-
Situate your company within the industry. Using the framework you’ve built, with info regarding the competition, the barriers to expansion or implementation, industry trends, and availability of consumer attention, you can introduce how your company is positioned within the industry and compares with other companies. Include statistical information about your business and be honest about all the advantages and disadvantages that your firm faces. [10] X Research source
Advertisement
-
Begin your report with a broad description of the industry. Open with a paragraph about the industry’s history. Write one or two paragraphs about the size, products, and geographic scope of the industry, including both manufacturing centers and consumer centers. Next, introduce your own company’s position within the larger industry context, and foreground how industry trends make the implementation of your business proposal desirable. [11] X Research source
- Determine what lifecycle stage the industry is in. Is it:
- Emerging? (very new industry growing at less than 5% per year)
- Growing? (a state of steady growth a bit over 5% per year)
- Shaking out? (a state in which companies are merging or consolidating, and/or other companies are failing)
- Maturing? (growth is slowing to less than 5% per year)
- Declining? (a state in which there has been no growth for a prolonged period)
- Determine what lifecycle stage the industry is in. Is it:
-
Provide a market analysis. Indicate expected growth in the industry, trends in products and technology, and factors influencing competition. Describe the competitive landscape in a general way. The rest of the business plan will elaborate on the state of the competition. [12] X Trustworthy Source U.S. Small Business Administration U.S. government agency focused on supporting small businesses Go to source
- Healthy industries are high-growth and generally profitable, with a stable customer base and few barriers to entry. Industries that should be avoided are those that are declining, generally unprofitable, highly competitive and regulated, or difficult to enter.
-
Describe customers’ outlook and demographic info. The analysis should describe who the major customer groups are and the unique properties of each. What is the age of your target customer? What is their race and ethnicity? Their needs and wants? [13] X Trustworthy Source U.S. Small Business Administration U.S. government agency focused on supporting small businesses Go to source
- Put yourself in the customer’s place. Think about what they see and experience when they first hear about or encounter your product or service. Consider how they think about their choices.
- In addition to considering your current customer base, think about how you can expand your product or service to attract new customers or pull customers away from your competitors.
-
Use the analysis to prescribe a strategy for the near future. Lay the strategy out in greater detail in the rest of your business proposal. Include a detailed timeline and specific goals, like revenues and market share, that you hope to attain. Address marketing strategies, product development ideas, and workforce issues which could position your company for growth within the industry. [14] X Research source
- You could close with a call to action. A statement like “Given the current state of the market, it is advisable to implement the following business proposal” followed by a rough outline of your proposal can function as a smooth transition into the rest of the plan.
-
Edit the report. Pare the report down to an appropriate and manageable size. An industry analysis report typically runs two to three pages. Tweak the length of your report based on how it will be presented. If it is part of a business plan, it is better to keep the analysis short and to the point. If your report will be presented independently, you have more freedom to devote lots of space to raw data and detailed descriptions.
Advertisement
Expert Q&A
Ask a Question
200 characters left
Include your email address to get a message when this question is answered.
Submit
Advertisement
Video
Tips
- Be sure to conduct a full investigation before finalizing the report.Thanks
- Because industry analysis reports often form part of a business plan and are intended to indicate how a company can maximize its profits, the final section of your report will be most important.Thanks
- An industry analysis is not simply a research report; all the information should be provided with an aim to position the company for success.Thanks
Submit a Tip
All tip submissions are carefully reviewed before being published
Name
Please provide your name and last initial
Thanks for submitting a tip for review!
Advertisement
References
- ↑ https://www.indeed.com/career-advice/career-development/how-to-do-an-industry-analysis
- ↑ https://sba.ubc.ca/business-basics/beginners-guide-business-research/industry-analysis
- ↑ https://www.indeed.com/career-advice/career-development/how-to-do-an-industry-analysis
- ↑ https://www.entrepreneur.com/article/241074
- ↑ https://sba.ubc.ca/business-basics/beginners-guide-business-research/industry-analysis
- ↑ https://bizfluent.com/info-7747775-importance-industry-analysis.html
- ↑ https://bizfluent.com/info-7747775-importance-industry-analysis.html
- ↑ https://www.entrepreneur.com/article/241074
- ↑ https://www.entrepreneur.com/article/241074
- ↑ https://www.indeed.com/career-advice/career-development/how-to-do-an-industry-analysis
- ↑ https://sba.ubc.ca/business-basics/beginners-guide-business-research/industry-analysis
- ↑ https://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis
- ↑ https://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis
- ↑ https://www.business.qld.gov.au/running-business/marketing-sales/market-customer-research/plan-conduct
About This Article
Article Summary
X
To write an industry analysis report, start with a broad description of the industry, including details of its size, products, and geographic scope. Then, provide a market analysis, indicating expected growth, trends in products and technology, and other influencing factors. Make sure to describe the major customer groups and their unique properties, such as age, race, needs and wants. You should also include a detailed timeline of specific goals, product development ideas, and workforce issues which could position your company for growth. Finally, edit the report down to two to three pages. For more tips from our Financial co-author, including how to identify different research sources, read on!
Did this summary help you?
Thanks to all authors for creating a page that has been read 320,130 times.
Reader Success Stories
- "The steps of researching your industry with independent government agencies, looking at trade association data and consulting an encyclopedia were most helpful. I had trouble figuring out the sources from where industry research is actually done." ..." more
Advertisement
88%
of readers found this article helpful
.
Click a star to add your vote
% of people told us that this article helped them.
"The steps of researching your industry with independent government agencies, looking at trade association data and consulting an encyclopedia were most helpful. I had trouble figuring out the sources from where industry research is actually done."
..."
more
"This article helps me to solve my problem how to prepare my report on teaching material for my students. I am a newcomer who wants to try making an exciting class from my teaching. Thank you so much."
..."
more
"All the information in this article is helpful indeed. That is why I always consult to wikiHow every time I have school reports. Thanks a lot!"
..."
more
"It helps me in writing my report about an extension of an existing tourism site."
"Very informative and helpful."
