An industry overview contains well-researched information about an industry, company or organisation. The document is also known as an industry analysis because it contains numerous aspects of an industry including growth, trends, and even competitors.
Industry overviews are often published by various financial and trade journals and in some cases is created by companies themselves when they want to share details about their industry. It is important to consider the sources of these financial publications and the research tools used. Basic information shared in this detailed document also includes the size of an industry, years of growth, achievements, qualifications for application, primary products, number of employees, customer base, net worth, earnings per annum, and other activities. This information is usually well documented in professional journals through a visual display of comprehensive and accurate graphs and charts.
A good history of the company is also anchored in an industry overview. Investors often use an industry overview when researching companies. The document helps with decision making when investors and venture capitalists decide to enter the industry or fund a company. The document provides information on the number of existing opportunities for new members and potential growth. Industry analysis can be used to forecast future market activity. This is based entirely on the information provided, key metrics and economic trends.
So, how do you get an industry overview? Creating a complete industry overview requires presenting comprehensive information about an industry to demonstrate that you truly understand the industry. Evaluating an industry is an integral part of your business plan. Creating an industry analysis means establishing organisational anatomy that aims to lay out the fundamentals of your company and how this will give you an advantage over other competitors.
Through this process, you can present an industry analysis:
Provide a brief description of the industry. Start by describing the background, demographics, products, role in the industry, and customers. Here you can apply the PEST analysis - Political, Economic, Social and Technological factors. This method includes the internal and external factors that shape the industry.
Conduct detailed research on the history of the industry. Review reports, changes and developments that have taken place in the last ten years. Pay attention to why and when these changes occurred and what impact they had - did the changes result in higher profit margins, lower production outputs, or increased manufacturing costs? Also examine trends over the past decade, such as technological advances. Question the impact of trends, such as whether there has been a reduction in human resources or whether this has led to improved performance. This research can help you forecast the future of the industry.
Include data on sales figures and growth patterns in your industry analysis. This will help you understand the industry’s growth stage and market. This can be seen from the annual sales figures over the last decade.
This allows you to determine the market level. Low sales figures imply two things;
Also, focus on trends in specific demographics and sales volumes. Are sales numbers increasing during a particular season? Are there improved sales in one specific geographical location? Which channels are producing greater sales — online or in-store? Proper research in this area can help you forecast long-term or short-term growth in the industry.
This section identifies major influences that shape the industry. This may include political regulations, rules, tariffs, industry policies, and standard practices of other companies.
Focus on the metrics of the industry. What determines success in the industry? Examine production costs, financial implications, the cost of manufacturing tools, profit margins between companies, amongst other factors. This will help you build a solid foundation for your business and impress investors when looking at the industry’s performance.
Evaluating an industry also involves knowing your direct competitors. Through market mapping, you can identify your direct competitors. You can use a SWOT analysis – Strengths, Weaknesses, Opportunities and Threats – to examine the position of other organisations and determine if they are your direct competitors in the industry. Market mapping also helps uncover the behavioural patterns and modus operandi of your competitors and even identify a potential market gap.
Focus on your position within the industry and take advantage of the opportunities that exist in the market and in the industry. Also describe your strategic ideas that will ensure success in the industry through your company. A well-detailed document about your position will attract investors and venture capitalists and convince them to buy stocks and bonds.
An industry overview requires a complete and accurate assessment of the sector. A qualitative review and analysis of the industry are essential in your business plan. You can utilize the data gathered and gaps found in your industry overview and market analysis to your advantage. This will help you strategically position your business to attract investors.
For example, in the telecommunications sector, not all regions are provided with telecom services. By market mapping, you can draw a graph and locate your competitors' unserved areas. You can capitalise on this gap and establish a stronghold in the region.
For more information on evolving sectors , see our list of the top 10 Growth Industries.
To find out more about the best tools for analysing a market, have a look at our guide to the best resources for a Market Analysis