Chapter 9 - Introduction to industry and company analysis. The topics discussed in this chapter are: Uses of industry analysis; industry classification systems; establishing a peer group; strategic analysis: Porter’s five forces; industry and product life cycles; demographic, governmental, social, and technological influences; company analysis; cost and differentiation strategies; spreadsheet modeling. | Chapter 9 Introduction to Industry and Company Analysis Presenter Venue Date Industry analysis is the analysis of a specific branch of manufacturing, service, or trade. Understanding the industry in which a company operates provides an essential framework for the analysis of the individual company—that is, company analysis. Section 2 discusses the uses of industry analysis. Sections 3 and 4 discuss, respectively, approaches to identifying similar companies and industry classification systems. Section 5 covers the description and analysis of industries. Also, Section 5, which includes an introduction to competitive analysis, provides a background to Section 6, which introduces company analysis. Section 7 contains conclusions and a summary. DISCLAIMER: Candidates should understand that this presentation is NOT a substitute for a thorough understanding of the CFA Program curriculum. This presentation is also NOT necessarily a reflection of all the knowledge and skills needed for . | Chapter 9 Introduction to Industry and Company Analysis Presenter Venue Date Industry analysis is the analysis of a specific branch of manufacturing, service, or trade. Understanding the industry in which a company operates provides an essential framework for the analysis of the individual company—that is, company analysis. Section 2 discusses the uses of industry analysis. Sections 3 and 4 discuss, respectively, approaches to identifying similar companies and industry classification systems. Section 5 covers the description and analysis of industries. Also, Section 5, which includes an introduction to competitive analysis, provides a background to Section 6, which introduces company analysis. Section 7 contains conclusions and a summary. DISCLAIMER: Candidates should understand that this presentation is NOT a substitute for a thorough understanding of the CFA Program curriculum. This presentation is also NOT necessarily a reflection of all the knowledge and skills needed for candidates to successfully complete questions regarding this topic area on the CFA exam. 1 Uses of Industry Analysis LOS: Explain the uses of industry analysis and the relation of industry analysis to company analysis. Pages 370-371 Industry analysis is useful in a number of investment applications that make use of fundamental analysis. Its uses include the following: • Understanding a company’s business and business environment. Industry analysis is often a critical early step in stock selection and valuation because it provides insights into the issuer’s growth opportunities, competitive dynamics, and business risks. For a credit analyst, industry analysis provides insights into the appropriateness of a company’s use of debt financing and into its ability to meet its promised payments during economic contractions. • Identifying active equity investment opportunities. Investors taking a top-down investing approach use industry analysis to identify industries with positive, neutral, or .
