One component of the Business Plan is a Company and Industry Analysis, I like to call this describing your pecking order in the marketplace. Consider if you will that you are starting a business and will be a little fish in a big pond. Describe you, the fish and describe the pond and where you fit into it, and if seeking investor capital, be sure to tell why you are a viable fish for a pond with bigger hungry fish?
Understanding your industry helps you identify trends in the markets that are likely to impact your business. Will there be a shortage of supplies and other resources that will drive up costs? Or, will there be a surplus that will drive down costs? Will there be an increase in demand for goods and services making it relatively easy to find customers? Or, will demand likely decline? Understanding the trends in the markets is a first step to identifying a market opportunity.
Industry analysis helps a firm to also fix long range plans, by gauging long term growth opportunities present if any. Strategic choice is nothing but, to screen all possible strategic alternatives followed by narrowing down the choice to the best suited and feasible alternatives and ultimately choosing an optimum strategy. To explain it in more clear terms, let us look at this example.Say, if there are three big players of car manufacturers in an automobile industry.
In order for a business to succeed in today's economy, you must find customers with money to spend. Even a quick study of your industry can reveal markets where demand is growing among particular types of customers and where the competition is not intense. Even if it doesn't, its good know such markets do not exist before you spend your time and energy, not to mention your savings, planning a business around an idea that has little chance of succeeding.
There are other tools that can be used, and we'll have a look at those at a later stage. If you use a software package to compile your plan you will find that they provide a market and industry analysis wizard that may save you a lot of time.
Understanding your industry helps you identify trends in the markets that are likely to impact your business. Will there be a shortage of supplies and other resources that will drive up costs? Or, will there be a surplus that will drive down costs? Will there be an increase in demand for goods and services making it relatively easy to find customers? Or, will demand likely decline? Understanding the trends in the markets is a first step to identifying a market opportunity.
Industry analysis helps a firm to also fix long range plans, by gauging long term growth opportunities present if any. Strategic choice is nothing but, to screen all possible strategic alternatives followed by narrowing down the choice to the best suited and feasible alternatives and ultimately choosing an optimum strategy. To explain it in more clear terms, let us look at this example.Say, if there are three big players of car manufacturers in an automobile industry.
In order for a business to succeed in today's economy, you must find customers with money to spend. Even a quick study of your industry can reveal markets where demand is growing among particular types of customers and where the competition is not intense. Even if it doesn't, its good know such markets do not exist before you spend your time and energy, not to mention your savings, planning a business around an idea that has little chance of succeeding.
There are other tools that can be used, and we'll have a look at those at a later stage. If you use a software package to compile your plan you will find that they provide a market and industry analysis wizard that may save you a lot of time.
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For more information on industry analysis, please visit: http://www.aqute.com also get guided on industry analysis.
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