Industry Analysis: Definition, Types, How to Apply, and more

Definition: Industry Analysis

An industry analysis is the thorough investigation and evaluation of the economic development and economic potential of an economic sector. Banks, savings banks and credit institutions regularly carry out such studies on individual industries in order to draw conclusions for the evaluation of a company in this economic sector and to take them into account when granting loans. For companies, the industry analyzes offer comparative values ​​that can be used to change the strategic direction. Entrepreneurs in particular can use an industry analysis to find out about the potential and risks of an industry
 

Creation of an industry analysis

When creating an industry analysis, the sales figures of several companies in the industry and the entrepreneurs' assessments of future developments are queried. Often banks, savings banks and credit institutions also fall back on the figures that arise in the day-to-day business of the bank. Balance sheets, profit expectations and the data of the loan applications of a single company are merged with the data of other companies. General economic data and further studies of other, related economic areas can expand the industry analysis.

Industry analyzes give an exact picture of the economic sector

Since all important data of an economic sector are collected in the industry analysis, these analyzes give a good picture of the entire turnover in the industry, cost structures and profits. The average values ​​determined in the analysis can be compared with the business figures of an individual company. This means that you can see at a glance whether the company is well positioned or whether improvements can be made. Banks and credit institutions also base their lending on these values.

Industry analyzes give founders an orientation

Industry analyzes are very useful for business start-ups and planned restructuring. Because from these investigations, business areas with great potential can be identified, in which an engagement is worthwhile. The future founder can base his plans on the average business results and take specific measures to realize these results. It can also make sense not to start a company in a certain industry with poor future prospects.

Access to industry analyzes

The creation of an industry analysis is time-consuming and accordingly cost-intensive. Creating your own analysis is usually not worthwhile. Savings banks and banks usually provide their analysis for a manageable amount. Abstracts are often available free of charge.  
 
 

 

SWOT-Analyse

The SWOT analysis seeks to identify the strengths (Strengths), weaknesses (Weaknesses), opportunities (opportunities) and risks / threats (Threats) derive in the company and in its environment strategic approaches .

The SWOT analysis has a military origin, is practiced in many martial arts and was developed for use in companies at Harvard Business School in the 1960s.

The opportunities are as possibilities considered to new or improved products and services to attract existing or new customers and to keep regular customers. These opportunities can be by offers from competitors or jeopardized by technological and economic policy changes .

As soon as the risks become too great from the point of view of the decision-makers , suitable measures must be taken. The choice of methods is based on assessment of their own strengths and weaknesses in comparison to the competition the decision-makers. 

SWOT analysis - structure and function

The SWOT analysis divides the strategic planning process into four components. A detailed definition of the goals serves to limit the scope to a specific area. The company analysis is concerned with the various strengths and weaknesses of the studied company , while environmental analysis deals with external factors. The latter are divided into opportunities and risks. Points found are prioritized and sorted according to their relevance.

from the results of the SWOT analysis Strategies are derived . The results are divided into four types:

  • SO strategies combine internal strengths with external opportunities in order to benefit from the latter.
  • ST strategies use existing strengths to avoid existing risks in the corporate environment.
  • WHERE strategies describe how opportunities are used by eliminating weaknesses.
  • WT strategies show which weaknesses have to be eliminated in order to avoid risks.

Clear separation of the SWOT analysis strategies

The demarcation of the internal analysis from the external is of great importance , the confusion is a common mistake. Example: The unique selling proposition is often perceived as a strength, but can be assigned to opportunities . It represents a way of differentiating itself from competitors. A classic strength is an efficient and inexpensive IT infrastructure.

SWOT Analysis - Advantages and Disadvantages of SWOT Analysis

The SWOT analysis provides a quick and compact overview of the current strategic state of a company . In addition, sensible procedures are identified in order to effectively eliminate problems in a company.

However, the selection of the relevant factors is subjective and therefore prone to errors . In addition, the interactions and the connection between various factors are not necessarily obvious, which makes it difficult to find a strategy.

SWOT analysis - example from the world of database development

Payment service providers aim to expand their user base. When analyzing your own company, you find that your process is safe, but cumbersome to use and that you have no experts in GUI design and HCI. The review of the environment shows that the provider can offer its services more cheaply than the competition, but whose market presence is difficult to penetrate.

  • SO strategy: Significant marketing of low prices combined with high security.
  • ST strategy: Enrich marketing with concise comparisons with reference to the competition.
  • WO strategy: employ GUI and HCI experts to convince customers of the inexpensive alternative.
  • WT strategy: Find GUI and HCI experts as quickly as possible so as not to become irrelevant.

 

 

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