Industry Analysis
Industry analysis maps an industry's structure, competitive forces, trends and key success factors so a strategy is built on the external picture, not just the internal one.
Trace a path from the industry's structure, through its forces and trends, to a single strategic call at the end.
Reach for this when…
- You're entering a market you don't know well and need more than a hunch.
- Margins are being squeezed and nobody can say precisely by whom.
- A board wants the external case for a strategy, not just the internal one.
How to run it
- Map the industry's structure: how many players, how concentrated, how easy to enter.
- Assess the competitive forces acting on margins: buyers, suppliers, substitutes, new entrants, rivalry.
- Track the two or three trends actually reshaping demand, not every trend in the sector.
- Identify the key success factors: what the winners do that the losers don't.
- Translate the picture into one call about where and how to compete.
A worked example
Situation. Wanjiru Kamau runs Kamau Coffee Exports, a coffee exporter in Nairobi, Kenya, and assumed her shrinking margin was roasters simply negotiating harder every year.
Applied. Running a structured industry analysis, she mapped the actual competitive forces and found the real squeeze was new entrants: certified-bean growers from two new regions undercutting her price, not her existing buyers pushing harder.
Result. She repositioned around a single-origin story the new entrants couldn't match, rather than competing on a price she was never going to win.
The catch
An industry analysis is a snapshot, and industries move; the forces you mapped can shift within a year, especially once a new entrant arrives with a different cost structure entirely. It also tends to describe the industry as it is, which quietly discourages the strategy that changes it. Treat it as a starting picture, not a verdict.
If the analysis only confirms what your industry already believes about itself, you've mapped consensus, not insight.