The importance of industry analysis for marketing capability cannot be overemphasized.Industry analysis and the associated skills used to carry out industry analysis are absolutely critical for your business, as they will help you gain an intimate understanding of the environment within which you’re operating.
Also, as long as entry is difficult, then the company players will face the same competitors throughout, which makes it much easier for them to adjust.
The bargaining power enjoyed by suppliers: Does the industry you’re trying to get into have a small number of suppliers?
If it is very easy for a new business to enter the market and set up shop, then the players already in the market are constantly facing the threat of new competition, in addition to the competition they already face from existing players.
If entry costs are especially high and it is extremely difficult for new players to enter the market, then whichever company currently enjoys a competitive advantage gets to enjoy that competitive advantage for a little while longer.
If the buyer enjoys most of the power in the market, then that buyer can demand lower prices on products, as well as better quality products and discounts, or after-sales services on those products.
Typically, this is what happens in industries where there are a few buyers but a lot of businesses offering the same product.This importance has various facets to it, however, and they can each be discussed in some detail.One of the greatest indicators of how well your business will perform in an industry is the performance of the industry as a whole.Throughout the process of industry analysis, you will be able to identify many different threats and opportunities.Threats are any phenomena that would impede the growth of your business, while opportunities are phenomena that would catalyze the growth of your business.Industry analysis is a tool that many businesses use to assess the market.It is used by market analysts, as well as by business owners, to figure out how the industry dynamics work for the specific industry studied.Their profitability will be affected by this, because there is a glass ceiling on the prices they can charge for their products and services.There are generally two kinds of substitutes: the first are products that have the same quality or function as the product in question, but are products are offered at a lower price, while the second are products that are offered at the same price as the product in question but are of a higher quality or greater utility.This can be crucial for a small business because dealing with difficult suppliers can have a direct influence on the price of a product, as well as its final quality.The bargaining power enjoyed by buyers: It’s a little different when we consider the kind of bargaining power that buyers have.