To determine the industry, you operate in and where your company stands within, you can conduct an industry analysis. Through this analysis, you’ll be able to learn more about your competitors, trade area, and customers.
By learning about the methods used to conduct an industry analysis, you can identify the internal and external factors affecting your company. These factors could be working for or against your business when it comes to profitability and growth.
Data analytics solutions like trade area analysis have also been helping companies gain a better understanding of their industry. Additionally, other solutions like market mapping tools and location intelligence analytics are also helpful for companies, depending on their goals.
In this guide, we’ll discuss industry analysis and its importance, how you can conduct one, different methods, and trade area analysis in detail. For advanced data science solutions, visit PREDIK Data-Driven.
What is Industry Analysis?
Industry analysis is a helpful market assessment tool. It helps analysts and businesses understand an industry and its competitive dynamics better. Business owners can get a better sense of everything that’s happening in their industry.
Running an industry analysis can let you know about the level of competition within and outside the industry, growth prospects in the industry, demand/supply statistics, technological changes, credit systems, and external factors influencing the industry.
For any company or entrepreneur, industry analysis helps them understand their company’s position in the industry and in comparison with other participants. They can predict threats, identify lucrative opportunities, and understand the scenario regarding the industry’s future.
Today’s business environment is ever-changing and to stay in the competition, understanding the ins and outs of the industry is extremely vital. You can learn not only about the present situation of an industry but also the future and use this knowledge to your advantage.
The Importance of Industry Analysis
Since industry analysis is a type of market assessment, it is crucial for understanding market conditions. It helps businesses forecast the demand and supply for their products or services. They can also estimate their financial returns in real-time.
This market assessment analysis also indicates the level of competition in the industry and the costs or expenses businesses would have to bear when entering or exiting the industry. If you’re a small business owner or startup, you can gauge important information about the industry.
Industry analysis helps identify the stage a particular industry is at, whether it is growing or will continue to grow, its benefits, and its saturation point. After studying an industry in detail, business leaders can discover various untapped opportunities and understand the industry operations better.
While industry analysis is subjective and doesn’t guarantee 100% success, it’s important to use the right method of data collection and interpretation. To avoid making wrong decisions, you need a good data collection and analysis partner.
Methods of Industry Analysis
Trade Area Analysis
Companies who want to know if their office, warehouse, or subsidiary will flourish or fail in a location can conduct a trade area analysis. This is a method of industry and market analysis that takes into account cross-company relationships and competitors present in the area.
Running this analysis will tell you about the growth of a particular industry in that trade area. Decision-makers can also use trade area analysis to secure their investments and to choose the right relocation or expansion strategies.
This method of industry analysis helps you analyze a particular trade area and the commercial activities taking place there. It’s a powerful big data tool that uses geolocation data. With geolocation intelligence tools, you can study a trade area from varying perspectives and angles.
Trade area analysis is a precise way to learn about the market’s potential, advantages and disadvantages, and competitor behavior. You can explore the area and collect valuable in-depth insights. It helps you forecast demand, curate an effective supply chain strategy, and gain more information about the facilities in the area.
The Competitive Forces Model
This is a famous model for industry analysis. It was developed to give an accurate and detailed impression of an industry. It shows us the intensity of rivalry, potential entrants, bargaining powers of suppliers and buyers, and substitute services or goods.
Broad Factors Analysis
This industry analysis method considers political factors impacting an industry, including regulations and policies about taxes, labor, trade, tariffs, and political stability. It also considers economic factors like interest rates and GDP growth rates. Social and technological factors also give a clear picture of the industry you’re operating in.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. SWOT Analysis is used for summarizing and determining the implications of different industry forces affecting your business. It takes into account internal and external factors and their probability of impacting the company.
PREDIK Data-Driven’s Trade Area Analysis
If you’re looking for data analytics tools to help you perform industry analysis, check out PREDIK Data-Driven. It’s a big data science company and research firm operating in the US. Their team of experts has been serving clients based in Europe, Africa, Latin America, and Asia-Pacific.
PREDIK Data-Driven offers market assessment tools like trade area analysis, predictive models, supply chain analytics, location intelligence tools, and customer analytics for conducting thorough industry analysis.
Request a demo today.