15 KiB
15 KiB
Industry Analysis Frameworks
Overview
This guide provides comprehensive frameworks for analyzing industries, markets, and competitive landscapes. These frameworks provide structured approaches to business intelligence and strategic decision-making.
Core Analysis Frameworks
SWOT Analysis
Purpose: Assess internal strengths and weaknesses alongside external opportunities and threats
Structure:
Positive Factors Negative Factors
Internal | Strengths | Weaknesses |
External | Opportunities | Threats |
Implementation Guidelines:
Strengths (Internal, Positive):
- What advantages does the company have?
- What unique resources or capabilities exist?
- What do competitors see as strengths?
- What factors drive sales and growth?
Weaknesses (Internal, Negative):
- What could be improved?
- What should be avoided?
- What factors cause losses or problems?
- What resources are lacking?
Opportunities (External, Positive):
- What market trends could be exploited?
- What technological changes create advantages?
- What regulatory changes benefit the business?
- What market gaps exist?
Threats (External, Negative):
- What obstacles does the business face?
- What are competitors doing that impacts the business?
- What technological changes threaten the business?
- What negative market trends exist?
TOWS Matrix Integration:
- SO Strategies: How to use strengths to capitalize on opportunities
- WO Strategies: How to address weaknesses to pursue opportunities
- ST Strategies: How to use strengths to avoid threats
- WT Strategies: How to minimize weaknesses and avoid threats
Porter's Five Forces
Purpose: Analyze competitive forces and industry attractiveness
The Five Forces:
-
Threat of New Entrants
- Barriers to entry (economies of scale, capital requirements)
- Brand loyalty and customer switching costs
- Access to distribution channels
- Government regulations and policies
- Expected retaliation from existing players
-
Bargaining Power of Buyers
- Number and concentration of buyers
- Buyer volume and purchase frequency
- Price sensitivity and product differentiation
- Availability of substitute products
- Cost of switching between suppliers
-
Bargaining Power of Suppliers
- Number and concentration of suppliers
- Unique inputs and differentiation
- Switching costs for buyers
- Forward integration threat
- Labor union power and availability
-
Threat of Substitute Products
- Availability of alternative solutions
- Relative price and performance of substitutes
- Buyer willingness to switch
- Perceived level of product differentiation
- Technological developments
-
Rivalry Among Existing Competitors
- Number and size of competitors
- Industry growth rate
- Fixed costs and exit barriers
- Product differentiation
- Brand loyalty and customer switching costs
Analysis Questions:
- How intense is the competition in this industry?
- What are the key barriers to entry?
- How much power do customers and suppliers have?
- What substitute products threaten the industry?
- What factors determine profitability in this industry?
PESTLE Analysis
Purpose: Analyze macro-environmental factors affecting business
Political Factors:
- Government stability and political climate
- Tax policies and trade regulations
- Labor laws and employment legislation
- Environmental regulations and policies
- Trade restrictions and tariffs
- Government incentives and subsidies
Economic Factors:
- Economic growth and GDP trends
- Interest rates and inflation
- Exchange rates and currency stability
- Consumer spending patterns
- Unemployment rates
- Business confidence indices
Social Factors:
- Demographic trends and population changes
- Cultural attitudes and lifestyle changes
- Education levels and social mobility
- Consumer preferences and buying habits
- Health consciousness and wellness trends
- Social media influence and communication patterns
Technological Factors:
- Research and development activity
- Automation and innovation levels
- Technological infrastructure
- Rate of technological change
- Impact on cost structures
- New product development capabilities
Legal Factors:
- Consumer protection laws
- Employment and labor laws
- Health and safety regulations
- Industry-specific regulations
- Intellectual property laws
- Data protection and privacy laws
Environmental Factors:
- Climate change and weather patterns
- Environmental regulations and policies
- Sustainability expectations
- Resource availability and costs
- Waste disposal and pollution concerns
- Renewable energy adoption
BCG Matrix
Purpose: Analyze product portfolio and resource allocation
Four Quadrants:
-
Stars (High Growth, High Market Share)
- Market leaders in growing industries
- Require significant investment
- Potential for future cash generation
- Strategy: Invest and maintain market position
-
Cash Cows (Low Growth, High Market Share)
- Market leaders in mature industries
- Generate more cash than required
- Foundation of the business
- Strategy: Maintain and harvest cash
-
Question Marks (High Growth, Low Market Share)
- Potential in growing markets
- Require significant investment
- Uncertain future performance
- Strategy: Invest heavily or divest
-
Dogs (Low Growth, Low Market Share)
- Low market share in mature markets
- Generate low or negative cash flow
- Limited growth potential
- Strategy: Harvest, divest, or liquidate
Specialized Analysis Frameworks
Value Chain Analysis
Purpose: Identify value-creating activities and competitive advantages
Primary Activities:
-
Inbound Logistics
- Receiving, storing, and distributing inputs
- Material handling, inventory control, transportation
- Supplier relationships and scheduling
-
Operations
- Transforming inputs into final products
- Manufacturing, packaging, testing, equipment
- Process efficiency and quality control
-
Outbound Logistics
- Collecting, storing, and distributing products
- Order processing, scheduling, delivery
- Distribution channels and customer service
-
Marketing and Sales
- Persuading customers to purchase products
- Advertising, promotion, pricing, channel selection
- Sales force management and customer relationships
-
Service
- Enhancing and maintaining product value
- Installation, repair, training, customer support
- Spare parts availability and complaint handling
Support Activities:
-
Procurement
- Sourcing raw materials and supplies
- Supplier relationships and negotiation
- Quality control and cost management
-
Technology Development
- Research and development activities
- Process automation and improvement
- Product design and innovation
-
Human Resource Management
- Employee recruitment, training, and development
- Compensation and performance management
- Organizational culture and relationships
-
Firm Infrastructure
- General management, planning, finance
- Legal, accounting, and quality management
- Organizational structure and systems
Blue Ocean Strategy
Purpose: Create uncontested market space and make competition irrelevant
Key Concepts:
Value Innovation:
- Simultaneous pursuit of differentiation and low cost
- Creating and capturing new demand
- Breaking the value-cost trade-off
- Aligning the whole system of activities
Four Actions Framework:
-
Eliminate
- Factors that industry takes for granted but should be eliminated
- Reduce complexity and cost structure
- Focus on value-creating activities
-
Reduce
- Factors that should be reduced well below industry standard
- Identify over-served customers
- Eliminate waste and inefficiency
-
Raise
- Factors that should be raised well above industry standard
- Address customer pain points
- Create new value propositions
-
Create
- Factors that industry has never offered
- Discover new sources of value
- Reconstruct market boundaries
Strategy Canvas:
- Visual representation of current strategic landscape
- Plot competitor factors and value curves
- Identify opportunities for differentiation
- Communicate strategic shift internally
McKinsey 7S Framework
Purpose: Analyze organizational effectiveness and alignment
Hard Elements:
-
Strategy
- Plans for allocation of resources
- Competitive positioning and market approach
- Response to external changes
- Sustainable competitive advantages
-
Structure
- Organizational chart and reporting lines
- Division of labor and specialization
- Coordination mechanisms and control systems
- Decision-making authority and responsibility
-
Systems
- Formal and informal procedures
- Performance measurement and evaluation
- Information systems and communication flows
- Operational processes and workflows
Soft Elements:
-
Shared Values
- Core values and organizational culture
- Mission and vision statements
- Superordinate goals and beliefs
- Organizational identity and purpose
-
Skills
- Dominant attributes and capabilities
- Core competencies and distinctive abilities
- Organizational strengths and weaknesses
- Human capital and talent management
-
Style
- Leadership approach and management style
- Employee attitudes and behaviors
- Organizational climate and atmosphere
- Communication patterns and norms
-
Staff
- Employee demographics and characteristics
- Training and development programs
- Performance and reward systems
- Socialization and team integration
Market-Specific Frameworks
Technology Adoption Lifecycle
Purpose: Understand market adoption patterns for new technologies
Adoption Categories:
-
Innovators (2.5%)
- Technology enthusiasts and visionaries
- Risk-takers and early adopters
- Focus on new capabilities and features
- Willing to tolerate bugs and limitations
-
Early Adopters (13.5%)
- Opinion leaders and trendsetters
- Recognize potential for competitive advantage
- Willing to invest in new solutions
- Provide valuable feedback and insights
-
Early Majority (34%)
- Pragmatists and practical thinkers
- Focus on proven solutions and ROI
- Require reference cases and testimonials
- Critical for mainstream adoption
-
Late Majority (34%)
- Conservatives and skeptics
- Focus on risk reduction and reliability
- Require established standards and support
- Price-sensitive and risk-averse
-
Laggards (16%)
- Traditionalists and resistors to change
- Focus on familiar and proven solutions
- Require significant pressure to change
- May never adopt new technologies
Chasm Theory:
- Critical gap between early adopters and early majority
- Different buying criteria and decision processes
- Need for whole product solution and market development
- Strategic importance of crossing the chasm
Customer Lifetime Value (CLV) Framework
Purpose: Analyze customer profitability and relationship value
CLV Calculation:
CLV = (Average Purchase Value × Purchase Frequency × Customer Lifetime) - Customer Acquisition Cost
Key Components:
-
Customer Acquisition
- Marketing and sales expenses
- Lead generation and conversion costs
- Onboarding and setup costs
- Channel and partnership expenses
-
Customer Retention
- Revenue per customer per period
- Purchase frequency and average order value
- Customer retention and churn rates
- Cross-selling and up-selling opportunities
-
Customer Lifetime
- Average customer relationship duration
- Retention rates by customer segment
- Lifetime value trends and patterns
- Factors affecting customer longevity
Strategic Applications:
- Customer segmentation and targeting
- Resource allocation and investment decisions
- Pricing and value proposition optimization
- Customer experience improvement initiatives
Jobs-to-be-Done (JTBD) Framework
Purpose: Understand customer needs and motivations for product usage
Core Concepts:
Job Statement: "When [situation], I want to [motivation], so I can [expected outcome]."
Job Dimensions:
-
Functional Jobs
- Practical tasks and problems to solve
- Measurement criteria and success metrics
- Functional requirements and constraints
- Alternative solutions and trade-offs
-
Emotional Jobs
- Feelings and perceptions to manage
- Social identity and status considerations
- Personal values and beliefs
- Emotional responses and reactions
-
Social Jobs
- How others perceive the customer
- Social status and group belonging
- Influence and impact on others
- Social norms and expectations
Job Mapping:
- Define the job and desired outcomes
- Identify constraints and obstacles
- Map the job process and steps
- Discover improvement opportunities
Implementation Guidelines
Framework Selection Criteria
Research Objectives:
- What specific questions need to be answered?
- What level of analysis is required?
- What resources and time are available?
- Who is the target audience?
Industry Characteristics:
- Industry structure and dynamics
- Competitive intensity and market maturity
- Regulatory environment and constraints
- Technological complexity and change rate
Data Availability:
- Accessibility of relevant information
- Quality and reliability of data sources
- Time sensitivity of information
- Analytical capabilities and tools
Combining Frameworks
Complementary Analysis:
- Use multiple frameworks for comprehensive understanding
- Cross-validate insights across different approaches
- Identify patterns and consistencies
- Address different aspects of business analysis
Integration Strategies:
- Start with broad frameworks (PESTLE, Porter's Five Forces)
- Apply specific frameworks based on research questions
- Use specialized frameworks for detailed analysis
- Synthesize findings into actionable insights
Best Practices:
- Document assumptions and limitations
- Use consistent terminology and definitions
- Validate findings with additional sources
- Update analysis regularly for changing conditions
This comprehensive set of frameworks provides structured approaches to analyzing industries, markets, and competitive landscapes, enabling thorough and actionable business intelligence research.