Lean Business Planning and Industry Profiles and Analysis
Published January 27, 2012 | 
Success is directly connected with action. That’s why successful people seem to always keep moving. They make mistakes, but they don’t quit. Instead they move to correct any mistakes and turn them into success.
An Industry Analysis is simply the analysis of conditions within a specific industry at a particular point in time. Now this can include the behavior and relations between competition, suppliers, and customers. So the understanding of the different factors that are constantly at work affecting the industry (i.e. market, political, economic etc.) is an extremely critical component of effective lean strategic planning for any company, and requires a comprehensive effort.
Why it’s Important
Industry Analyses bring an understanding of the industry’s big picture to you and your readers. The identification of the mixture of threats and opportunities your business faces at any time, ultimately helps determine strategies and processes to create highly-competitive advantages. The better prepared you are when you enter the market can put you farther down the road to achieving established objectives and goals.
What’s in it?
There are always several factors that can affect the industry which may include government regulations, environmental issues, as well as market conditions and economic circumstances, any of which can have a direct affect on your chances of starting a successful business in the industry.
The size of your industry by both revenue and number of firms.
Industry growth trends, units sold, or the employment situation.
Identifiable growth or declining trends in your industry are important.
Discuss any important historical trends in previous years.
Trends forecast if available for the coming years. Be sure and include supporting research.
Identify critical barriers of entry for your industry.
Future growth in number of companies expected to enter your industry.
The cost of government regulations that may affect your industry and business, and is your industry highly regulated, or not.
Provide a broad explanation of the common methods of distribution for products and services in your industry.
Let’s examine a few of the most common mistakes sometimes found in the industry analysis section of a business plan.
Not demonstrating a solid understanding of how your industry functions. Your experience is important, so don’t let the information indicate a lack of experience.
Appear seemingly unaware about the companies that form your industry. It’s critical to understand and address your market including businesses that may be your direct competition.
Lacking understanding about where and how your business fits into the distribution channel of your industry. Poor understanding of distribution channels is fraught with potential inefficiencies and can be extremely costly.
Appear to carelessly omit growth trends, revenue size, and significant statistics for your industry. Never omit information and industry data that should automatically be included to present a complete picture of what to expect and effectively plan for in the market.