INDUSTRY

ANALYSIS
CHAPTER 10
Motivation
Intelligence plus character
– that is the goal of true
education.

– Martin Luther King, Jr.

Objectives
At the end of this lesson, the
students should be able to:
1. distinguish the different
services or products of
business and industry in
the locality
2. Identify the factors which
are considered in an
environmental analysis
3. Discuss the important
factors in industry analysis
4. Follow the guide to
industry analysis
5. Enumerate the different
environmental forces in the
economy
 • In a book published by the Development
Academy of the Philippines, How to
prepare Project Feasibility Studies, it
includes an industry analysis of the
following important factors.
1. Competition
Industry
2. Customers
Analysis 3. Suppliers
4. Substitutes
Competition
We may ask the question:
1. Who are the major businesses in the industry?
2. Are the locations close to your proposed
business?
3. Have they been long existing or still new
entrants?
4. What is the market share of each of this
business?
• It is very important that you know your
competitors and be ready for them. Your aim is to
win their customers, convince them to buy from
you instead, and remain as loyal customer.
Customers
We may ask the question:
1. Who will you sell your product to? (The
target market must be identified)
2. Who exactly will buy your product?
3. What income groups?
4. What age brackets?
5. What gender?
6. What career groups?
7. What type of people will you cater to,
based on their preferences, lifestyle,
and buying habits?
Suppliers
1. Every retail business needs suppliers from
whom one can source raw materials,
intermediate products, or even finished
goods one intends to sell.
2. A business may need one or more suppliers.
3. A business owner can buy directly from the
manufacturers
4. Another alternative is to buy from
distributors
5. A third source of goods is through imports
6. It is important to maintain good
relationships with one suppliers
Substitutes
1. Substitute are goods that can be used in place of
another
2. These are goods that may, even if partly, satisfy the
same needs of a consumer such that the consumer may
use one instead of another.
3. This is why manufacturers try to differentiate their
products from their competitors so that the customers
will develop product loyalty for their brand.
4. The more differentiated a product is, the greater the
edge of its manufacturer because this can convince the
costumers to buy their product instead of that of the
competition
 • An industry analysis guide developed by North
Carolina’s Small Business and Technology
Development Center (SBTDC) can help in making
an analysis of one's business industry.
A Guide to 1. Geographic Area – identify the area whether
Industry local, regional, nationwide, or international.
Analysis 2. Industry (Size) – worth in pesos and number of
firms, trends, and developments and future
outlook.
3. Product – describe the product as to physical
attributes and characteristics, and its uses.
 4. Buyers – describe target market as to
age, income group, geographical
location, occupations; include consumer
demographics such as
population/household size, sex, race,
ethnicity, family status, housing status,
A Guide to etc.; may include psychographics such as
Industry lifestyle information, tastes, preferences,
and buying habits
Analysis 5. Regulatory Environment – should
include government laws and
regulations that apply to the business
6. Company information – make a list of
the most successful businesses in the
industry
 7. A brief history of the industry – when it
started and how it developed
A Guide to 8. Factors that affect growth of the
Industry industry – such as migration of
population from rural to urban areas.
Analysis 9. Trends in sales over recent years – show
actual sales in the industry over the past
5 years
 10. Current operational/management
trends – trends within the industry,
which are standard practices prevalent
A Guide to among the firms
Industry 11.The types of marketing strategies
prevalent within the industry
Analysis 12.Competitor information – include the
location of competitors and how long
they have been in business and their
market share
Environmental Analysis
The other analysis that has to be done is an analysis
of the environment in which the business will
operate. This means an evaluation of the possible or
probable effects of external forces and conditions on
the survival and growth of the business.
1. Economic forces – this involves a look at
economic factors such as inflation, recession,
prosperity, demand, and supply in the market.
2. Physical environment – this includes a look at the
population size, the geography of the place
where business will be located, land distribution,
climate, and in today’s global warming situation,
whether or not the area is prone to flood or
earthquake.
Environmental Analysis
3. Political factors – the type of government, the
stability and strength of the government, and
good leadership are factors that can be an
advantage to a business.
4. Cultures and lifestyles – it is important to study
cultural practices such as fiestas, celebration of
Christmas season, trends in consumption
patterns, as a means to identify the goods and
services that will fit into these celebrations and
spending behavior.
5. Competition – this is something that needs to be
studied. As already mentioned above, the degree
of competition are very vital in determining the
success or failure of a business.
QUIZ

NAME: ____________________________________ DATE: _______________

COURSE/SECTION: __________________________ SCORE: ______________
Identification: Write the correct answer on the space provided before the number.
• EXPERIENTIAL ACTIVITIES:

1. Think of a new product you would want to introduce in the market. It can be a good
already being sold but which you can innovate and improve, or it could be something
really new that you yourself conceptualized. Describe that product in terms of design,
composition as to material used, product use or application, and its attributes which you
believe are unique in that product.