Subject Name: Business Strategy

Topic Name(s): Industry Analysis

Lecture No: 15

Suman Choudhary,
ISBM

08/23/2020 Lecture Number, Unit Number 1

 Industry Analysis

BASICS

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 Uses of Industry Analysis
Understanding a company’s
business and business
environment

Identifying active equity

investment opportunities

Portfolio performance
attribution

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 Approaches to Identifying Similar Companies

Business-
Cycle
Sensitivities
Products
and/or Statistical
Services Similarities
Supplied

Industry
Classification

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 Cyclical and Noncyclical Companies

Cyclical
Company
High
operating
Expensive, leverage
nonessential
products
Profits
strongly
correlated
with
economic
activity

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 Limitations of Industry and Company
Descriptors

Defensive
Industries

Cyclical Industries Growth Industries

Growth
Companies

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 Commercial Industry Classification Systems

Global Industry Classification

Standard (GICS)

Russell Global Sectors (RGS)

Industry Classification
Benchmark (ICB)

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 Representative Industry Sectors
Basic Materials and Processing

Consumer Discretionary

Energy

Financial Services

Industrial/Producer Durables

Technology

Telecommunications

Utilities

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 Governmental Industry Classification Systems

International Standard Industrial Classification of

All Economic Activities (ISIC)

Statistical Classification of Economic Activities in

the European Community (NACE)

Australian and New Zealand Standard Industrial

Classification (ANZSIC)

North American Industry Classification System

(NAICS)

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 Constructing a Peer Group
Examine commercial classification systems

Review company’s annual report

Review competitors’ annual reports

Review industry trade publications

Compare business activities

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