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What is Industry Analysis?


Industry analysis:

Industry is a sector which produces similar goods and services for sale. There are 3 types of industries:
·         Primary Industry: In primary industry the raw materials are collected or stored for next process. In other words natural resources are collected which act as a raw material for next process.
·         Secondary Industry: In this industry the raw material collected in primary industry are used in this industry for manufacturing the product.
·         Tertiary Industry:  Tertiary industry provides the product and services to consumer. It does not produce anything like above two industries.

Factors affecting Industry Analysis:

·         Past sales: The past sales data of an industry helps to determine the future sales and sales growth level. With the help of past records industry can find out the factors which affect the sales. It helps to detect the future sales by considering those factors.
·         Government policy: The government rules and regulations also affect the industry analysis method. Government imposes some restrictions and provides some benefits to grow their market. For example government charges 30% corporate tax it affects the earnings of industry.
·         Competition level: It is very tough, for introducing new product in the market by industry. The new product has to face competition with existing product. The branding and advertisement increases the price of new product. The existing product has already an established brand. The competition level affects the analysis of Industry.
·         Labour: The workers of an industry play major role or part. If the workers perform their work properly and uses resources efficiently then the performance of an industry increases in future. But if they are not able to perform their duty then it affects the industry reputation and reduces the revenues. Like if the workers go on strike then the production level affects badly and if the issues are not resolves in time it affects in future earnings and reputations also.
·         Performance level:  The earnings of an industry help to forecast the future earnings of an industry. The product which offers by industry does not obsolete by time. The technologies are changes day by day so products are also changes according to the technology or time. The short time product does not perform well in long time.

Stages of industry life Cycle:

·         Introduction Stage: This is the first phase of an industry which is also known as primary stage. In this stage a new products is formed and enters into a market. The product is new in the market so, the industry spends money for advertisement to aware the consumers about the new products in the market. So, that’s why the product cost is high. But to face the competition industry sells the products in loss.
·         Growth Stage: In this stage public aware about the new products come in a market and they started to purchase it. If it satisfies the needs of consumers then the products sale increases and the industry recover all loss faces in previous stage.

·         Maturity Stage: At this stage product selling level is at peak or high point. In this stage the product established the brand or position in the market.
·         Decline Stage: In this stage the sale of a product declining. Soon or later that product is out of the market.

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