Industry Analysis of Business Opportunities PDF

INDUSTRY ANALYSIS OF BUSINESS OPPORTUNITIES OBJECTIVES After reading and analyzing this module, the learners will be able to : Discuss principles, tools, and techniques Define types of industries  ECONOMY-ENVIRONMENT ANALYSIS Environmental economics is primarily concerned with the impac...

INDUSTRY ANALYSIS OF BUSINESS OPPORTUNITIES OBJECTIVES After reading and analyzing this module, the learners will be able to : Discuss principles, tools, and techniques Define types of industries  ECONOMY-ENVIRONMENT ANALYSIS Environmental economics is primarily concerned with the impact of economic activities on environment and its implications for the individual firm, industry and the economy as a whole. ECO-DEVELOPMENT The main objective of environmental economics is to maintain a balance between economic development and environmental quality WELFARE APPROACH Environmental economics has emerged as a discipline to tackle environmental problems from an economic welfare framework ENVIRONMENTAL VALUES Environmental issues are about resources. The neo- classical economists have analyzed the use of various resources like fisheries, forests, fossil fuels and water in a rational manner and with environment values. CLEAN TECHNOLOGY It defines a set of technologies that either reduce or optimize the use of natural resources,whilst simultaneously reducing he negative effect that technology has on this eco system INDUSTRY ENVIRONMENT ANALYSIS is a study or exercise done to assess the current industry environment.this exercise helps understand the various aspects and predict trends of the industry better, and helps in many other ways. THE INDUSTRY ENVIRONMENT is composed of the following stakeholders, around which analysis is done. Namely: competitors, suppliers, and buyers. There is also other major consideration like political,legal technological aspects which are part of environment analysis PEST AND PESTEL are two model used to analyze political, legal, social, economic, environment and technogical factors pertaining to that particular industry. PRINCIPLES, TOOLS, AND TECHNIQUES MICROENVIRONMENT organization’s industry, and the upstream and downstream related to it INDUSTRY is a group of firms producing products that are close substitutes UPSTREAM provides raw materials or inputs for the focal industry DOWNSTREAM markets are industries (sometimes consumer segments) that consume the industry outputs. PESTLE ANALYSIS is used as a tool by companies to track the environment they're operating in or are planning to launch a new project/product/service, etc. POLITICAL These factors determine the extent to which a government may influence the economy or a certain industry. ECONOMIC These factors are determinants of an economy’s performance that directly impacts a company and have resonating long term effects. SOCIAL These factors scrutinize the social environment of the market, and gauge determinants. TECHNOLOGICAL These factors pertain to innovations in technology that may affect the operations of the industry and the market favorably and unfavorably. LEGAL These factors have both external and internal sides. There are certain laws that affect the business environment in a certain country while there are certain policies that companies maintain for themselves. ENVIRONMENT These factors include all those that influence or are determined by the surrounding environment.  KEY POINTS SUPPLIER POWER The stronger the power of suppliers, the more difficult it is for firms within that sector to make a profit because suppliers can determine the terms and conditions. BUYER POWER The stronger the power of buyers, the more likely it is that they will be able to force down prices and reduce the profits of firms  COMPETITIVE RIVALRY This measures the degree of competition between existing firms. The higher the degree of rivalry, the more difficult it is for existing firms to generate high profits. The factors that affect the intensity of firms' rivalries are: (1) numerous competitors. (2) slow industry growth, (3) high fixed costs, (4) lack of differentiation, (5) high strategic stakes and, (6) high exit barriers.  THE THREAT OF SUBSTITUTION This measures the ease with which buyers can switch to another product that does the same thing. THE THREAT OF NEW ENTRY Companies often find it difficult to identify new competitors and identifying new entrants is important because they can threaten the market share of existing  TYPES OF INDUSTRY INDUSTRY refers to the production of goods and services by converting the inputs into outputs and or creation of the utilities to customers.It may refer to an extraction,generation, conversion or production of goods and services or construction building products for a certain price A. PRIMARY INDUSTRY It refers to the creation of utilities by extracting materials from natural resources or the growth and development of vegetation and animals by means of reproduction process. Primary industries are further classified as extractive and genetic industries. TYPES OF PRIMARY INDUSTRY 1.) Extractive industry - it refers to the extraction or drawing out of goods from the natural resources like land, water, air etc. and creation of utilities in them. 2.) Genetic industry – it is related to the growth and development of flora B. SECONDARY INDUSTRY Industries which produce finished goods by the use of materials and supplies taken from the primary industries. According to the process applied and the nature of the product, these industries are divided into the following two types. TYPES OF SECONDARY INDUSTRY 1.) Manufacturing industry - It is concerned to the production of goods by using raw materials or semi raw materials an input and also creates from utility in them  a. Analytical industry: This industry relates to the analyzing and separating different components from a single material. b. Synthetic industry: This industry relates to the putting of various raw materials together to make a final product. c. Processing industry: An industry, which produces the final products by using raw materials and semi raw materials through different stages of production. d. Assembling industry: It refers to that industry which assembles various component parts that are already manufactured to make a new product. e. Construction industry: The industries, which are concerned to the 2.) Service Industry engineering, - Industries erecting which doofnot and construction produce building physical goods but products create utility services and sell them for a price. LET’S QUIZ LET’S QUIZ LET’S QUIZ THANK YOU