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3-1. Introduction. Industry A group of firms producing a similar product or service Industries vary by Size Growth-rate structure Financial characteristics Attractiveness. Target Market. Target Market

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3-1

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  1. 3-1

  2. Introduction • Industry • A group of firms producing a similar product or service • Industries vary by • Size • Growth-rate structure • Financial characteristics • Attractiveness

  3. Target Market Target Market The limited portion of an industry that it goes after or tries to appeal to at a certain point in time

  4. Industry

  5. Industry Definition Define the firm’s industry

  6. Industry Size, Growth Rate, and Sales Projections • Display financial information in a multiyear format • Display your information graphically • Produce information on your industry on a regional or local basis • Report both positive and negative information on your industry

  7. Size • Displayed in dollars over a 3- to 5- year period

  8. Growth • Should be reported on a percentage basis with an interpretation of what the numbers mean

  9. Industry Sales Projections • Report future sales projections for your industry • Include concrete numbers of anticipated sales and growth rates

  10. Industry Characteristics • Industry structure • Nature of the participants in an industry • Key ratios • Key success factors

  11. Industry Structure • Concentrated or fragmented • Concentrated industries are dominated by a few large firms • Fragmented industries include a large number of smaller companies • General attractiveness • A structurally attractive industry has high barriers to entry, no good substitutes for the product, limited power of supplier, and limited power of buyers

  12. General Attractiveness

  13. Ratio • Report an industry’s key financial ratios and other ratios of interest

  14. Key Success Factors • Examples • Brand name recognition • Access to distribution channels • Quality of products • Ease of use • Price • Marketing support • Quality of customer service

  15. Industry Trends Environmentaltrends Business trends

  16. Environmental Trends • Economic trends • Social trends • Technological advances • Political and regulatory change

  17. Business Trends • Profit margins • Innovation • Input costs

  18. Long-term Prospects Include a brief statement of beliefs regarding long-term prospects for the industry

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