Question

Provide Various factors to be considered for the industry analysis with some examples

Answer 1

Various factors which is to be considered for industry analysis are as follows-

A. Consideration of the demand and supply in the industry is one of the major factor which will be considered for the industry analysis because consideration of the demand and supply will determine the level of sales of a company.

For example, when there will be a higher demand, there will be a price hike and increase in sales.

B. Intensity of the competition in the overall industry as it is determining the overall pricing of product in the industry and it will also determine the core competitiveness.

when there will be a high competition in industry, there will be reasonable price for the consumers.

C. Impact of subsidies by the government on the overall industry are also leading to cutting on the cost of the overall industry and hence it is related to lowering the prices of the products of the company because it is getting a benefit in the form of cost deduction.

D. Specific formulation of rules and regulation for that particular industry by the government can also lead to positive and negative implication for that particular industry as formulation of additional environmental compliance can lead to additional cost.

E. the availability of the substitute in the industry is also determine in the label of homogeneous products which are providing the individuals with a large amount of choice for selection of different products and it will offer the consumer with maximum flexibility.

Hence, these all are the factors which are to be considered for the industry analysis which are helpful in maximization of rate of return if there is a proactive analysis on the part of the company.