Industry Analysis

Are you asking yourself, how do I develop my idea into a business? The first step in evaluating the feasibility of your idea is to do an Industry Analysis to understand the industry that your business concept will focus on. This will provide an educated estimation that includes statistics, porter 5 forces analysis, statistics and fundamental analysis of the viability of your business concept.

Importance of Understanding Your Industry

The analysis focuses on group dynamics. This indicates that group behavior can be forecasted at a higher certainty than the behavior of individual members in that group. If one is able to understand how the behavior of the industry changes then one can better adapt to the changing environment. This is becuase companies within an industry tend to follow the same patterns. So, its important to understand who are the leaders in your industry and this will also help with benchmarking when preparing the financial statements for your company.

Concept of Fit in Industry Analysis

After performing the analysis, you will be know what types of businesses are leading and lagging in the industry. You will also know where the blue oceans are and this will lead to more business concepts. In addition, you will discover the industry financials, which will be useful in benchmarking as you develop the financial plans regarding your idea. At this stage, focus on the industry and learn as much as you can about the industry. In the feasibility study, you can evaluate the effectiveness of you business concept.

NAICS Classification System

All businesses in United States are classified under certain industry codes established by the North American Industry Classification System (NAICS). Prior to NAICS codes, businesses were classified under the Standard Industrial Classification(SIC) system. The NAICS codes are six digit codes that identifies the industry, sector and the type of business. More information and how to instructions about the codes referring to specific sectors can be found here.

The above video provides detailed information about finding the NAICS codes for specific businesses.

DIY – Download the Industry Analysis Plan

You can download the analysis outline by clicking the download button and use it to complement your research. I used this outline to develop a business plan for my concept as an undergrad. With this you will discover numerous tips on howto refine your concept. Thank you again for reading my post on Industry Analysis and how it can be beneficial to your firm.

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Feasibility Analysis

Feasibility analysis follows industry analysis. After performing the industry analysis, one can be certain about the specific industry being pursued.  Feasibility analysis helps to shape the business concept so the idea can be feasible in the specific industry.

Strategic and Tactical Approach to carving a superior opportunity

The approach taken by feasibility analysis is one that covers almost all aspects of a business. Strategic planning refers to long term goals such as the mission and vision of the company. Tactical approach answers the question of how something will be done to achieve the strategic goals.

Here, you will perform the following:

  • Choosing the appropriate strategy to enter the market such as differentiation
  • Performing market analysis and identify the “pain” experienced by the potential customers
  • Doing a marketing tactical plan to evaluate the optimal channels to reach highest number of potential customers
  • Deciding the features and benefits of your product or service and how customers can benefit from your product
  • Determining the hierarchy of your business so it can be easily scalable with increase in demands
  • Performing a breakeven analysis at given price-points to determine when the business starts a positive cash-flow and makes profit.
  •  Determining when is a good time to launch the business
  • Finally deciding upon the exit strategy.

Download the Feasibility Outline

The above is a list of few points from the Feasibility analysis outline. I have used the feasibility outline plan to develop my business concept and you can also use it to develop your ideas. You can download the feasibility outline by clicking on the download button.

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