The industry refers to the larger landscape, as in the computer hardware wholesale industry or thecard and gift retail industry or the architectural services industry. The focus here is on what is happening in, and the relative attractiveness of, the industry as a whole. You are looking at the entire industry in the U.S. or globally. As such, this section does not involve any description of your companor your local market. This section of your plan needs to include the following information/address thefollowing questions:
A. Summarize the industry in which the proposed business will operate:
Give the relevant NAICS code for the industry.
How is the industry constructed/segmented?
B. Discuss briefly industry size (in dollars) and annual growth rate (%):
Where is the industry in its life cycle---emerging, early growth, rapid growth, early maturity, maturity,decline?
What are the implications of the current stage, for your venture strategy?
C. Discuss the structure of the industry at present.
How concentrated or fragmented is the industry?
How many players are there, and how many are large versus small?
Who are the largest and most important players in the industry?
Outline the key players in the industry.
What is the basis for competition in the industry (i.e. price, differentiation, etc.)?
D. Highlight key trends in the industry:
Are costs going down or up?
What about prices?
Discuss any new products or developments, the rate of new product development, new markets and customers, new selling approaches, new pricing methods, new requirements or regulations, new entrants and exits, new technologies.
Discuss any other national or economic trends and factors that could affect the ventures business positively or negatively.
E. Determine the key success factors for the industry and draw conclusions.
What are the winners able to do consistently that the losers or also-rans to not do? What are the implications of the above for your strategy?
F. Provide standard financial ratios for the industry:
Summarize key ratios (i.e. liquidity ratio/ROI/etc)
Interpret the ratios so as to inform your competitive strategy
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