Chapter 3 - Industry analysis: The fundamentals. This chapter presents the following content: The objectives of industry analysis, from environmental analysis to industry analysis, porter’s five forces framework, applying industry analysis, industry & market boundaries, identifying key success factors. | Industry Industry Analysis Analysis The The Fundamentals Fundamentals OUTLIN E The objectives of industry analysis From environmental analysis to industry analysis Porter s Five Forces Framework Applying industry analysis Industry amp market boundaries Identifying Key Success Factors The The Objectives Objectives of of Industry Industry Analysis Analysis To understand how industry structure drives competition which determines the level of industry profitability. To assess industry attractiveness To use evidence on changes in industry structure to forecast future profitability To formulate strategies to change industry structure to improve industry profitability To identify Key Success Factors From From Environmental Environmental Analysis Analysis to to Industry Industry Analysis Analysis The national The natural international environment economy THE INDUSTRY ENVIRONMENT Demographic Technology Suppliers structure Competitors Customers Government Social structure amp Politics The Industry Environment lies at the core of the Macro Environment. The Macro Environment impacts the firm through its effect on the Industry Environment. Profitability Profitabilityof ofUS USIndustries Industries Median return on equity 1999-2002 Pharmaceuticals Gas amp Electric Utilities Tobacco Food and Drug Stores Household amp Personal Products Motor Vehicles amp Parts Food Consumer Products Home Equipment Medical Products amp Equipment Railroads Beverages Hotels Casinos Resorts Scientific amp Photographic Equipt. Insurance Life and Health Commercial Banks Building Materials Glass Publishing Printing Metals Petroleum Refining Semiconductors amp Apparel 14. 3 Electronic Components Computer Software Insurance Property amp Casualty Electronics Electrical Equipment Food Production Furniture Telecommunications Chemicals Forest and Paper Products Computers Office .
