An industry analysis provides you with a comprehensive picture of the most significant macro trends. This information will help inform your next step, which is searching for a target company or companies within that industry. The analysis includes: industry focus, industry plans, success factors and solution components.
Using the categories from the Five Forces Analysis, let’s look at my mutual fund industry analysis.
- Competition: The mutual fund industry is an increasingly competitive one; due in large part to substantial market opportunity presented by retiring baby boomers, as well as continued economic instability.
- New Entrants: While genuinely new entrants are relatively few, many established firms have increased their activities in this market.
- End users/Buyers: As a result of the industry’s new efforts and products, customers have many more choices than before.
- Suppliers: The most significant suppliers here are suppliers of client relationship managers—both new to the industry and seasoned professionals.
- Substitutes: In this industry, an important substitute product is the Separately Managed Account (SMA) or Unified Managed Account (UMA). SMAs/UMAs are individual investment accounts managed by “money managers.”
View my mutual fund industry profile , including several potential solutions that I identified.
Since industry trends are constantly changing, you have to work to stay on top of them.