Industry Analysis Format

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 Executive Summary

 Mission Statement: This explains to the reader why your


company exists. Its mission statement should guide the
activities of your company.
 Company Information: This is a brief statement giving a
historical perspective of your company. It should include the
date of formation, locations, company founders, and current
employees.
 Highlights: This is an opportunity to tell the reader about profit
or market milestones achieved by the company since its
inception.
 Products and Services: Briefly mention and describe the
company’s products or services.
 Financial Information: This section is particularly important for
companies seeking financing and should include mention of
bank references and investors.
 Future Projections: Explain the direction in which ownership
and management plan to take the business

 Business Description

 Begin the description with a few sentences that give a


capsule view of the company, its product, and its position in
the industry in which it competes.

 The business description should continue with a statement


about the type of business structure adopted by the
company. Explain whether it is a corporation, partnership,
sole proprietorship, or limited liability company, and list the
principals’ names along with brief profiles for each one
showing how their presence benefits the company.
 Part of the business’s description should include
o information about the company’s products and services,
o distribution channels, competitive advantages offered by
product features, and
o how the company plans to exploit those advantages.
End the business description by explaining
o the specifics of how the company plans to be profitable.
 The business description section of a business plan should
not be overly long. Depending upon the company’s size and
the number of products offered by it, a description that is one
to two pages in length should suffice.

 Business Environment Analysis

 A business environmental analysis accomplishes section


accomplishes this by providing useful information to
management and company owners. Analyzing this data allows
the management team to identify those plans and strategies
that are not.
 internal and external factors that influence how business is
conducted.
o Internal factors include a company’s business culture,
its organizational structure, and the methods by which it
is managed.
o External environmental factors might include
 government activities such as laws and regulatory
actions,
 economic changes such as recessions, social
trends and movements that shift consumer
preferences, and
 innovations in technology that can help or damage
a business’s profitability and productivity.
 A systematic process of analyzing the environment to identify
those environmental factors affecting a company determines
its impact on the business and developing strategies to take
advantage of them or limit their effects.
 Three of those tools are the industry analysis, the competitor
analysis, and the market analysis that should be included
when writing a business plan.
 Industry Analysis
 Step 1: Give a brief overview of the industry. Define the
industry in terms of historical background, the geographic area
it services, and its products.
 Step 2: Review trends and growth patterns that have existed
within the industry.
 Step 3: Identify factors that influence the industry. These might
include government regulatory policies and competitive
practices of other businesses.
 Step 4: Using data gathered through research, the industry
forecast anticipated growth. The predictions should be both
long- and short-term.
 Step 5: Describe how your company will position itself within
the industry. Focus on how your company can take advantage
of opportunities identified within the industry.

 Competitive Analysis
 Create a list of your current and future competitors
 Gather data and information about your competitors, their
products, and their marketing and pricing strategies
 Review and analyze the data
 Create a list of your competitors’ strengths and weaknesses
 Create strategies to take advantage of competitors’
weaknesses while a minimizing threats posed by their strengths

 Market Analysis

market analysis should offer an overview of the marketplace, the


positions held by your competitors, and other facts to support your
company’s strategies about marketing, production, and
distribution.

Some of the key topics that should be addressed in


this section include:
 A description of the industry and the market. This should
include information about projected growth, potential changes in
consumer demand, and anticipated trends or cycles that could
affect product performance.
 Describe your customers. Describe the customer need that the
product or service satisfies. Provide demographics about your
customers and show how the product your company offers falls
within those demographics.
 How big is the market? If your market research shows that the
market has been shrinking, a decision to enter or continue in the
market should be supported by research supporting a prediction
for future growth.
 Describe and explain the pricing structures of your company
and its competitors. Describe how your marketing and pricing will
give your company an advantage in the market, or describe what
changes must be made to give your company an edge.
 The data collected in the competitive analysis can be
incorporated into the market analysis to show how your company
will compete with other companies offering the same or similar
products or services.

 Marketing Plan

The purpose of a company’s marketing plan is to attract customers


willing to purchase a particular product or product line. Creating a
market for the product or service your company offers began with
the business environment analysis and continues by developing a
marketing strategy. A marketing strategy must be flexible and
should be evaluated periodically to determine if it must be
reworked due to changes in the marketplace.

Marketing plans frequently include strategies for four stages.

 Penetration strategies represent the company’s plans for its


initial entry into the market.
 Growth strategy builds upon a product’s success by introducing
it to different users or into new markets.
 Another strategy analyzes new or alternative methods of
distributing a company’s product to increase sales, such as
hiring salespeople or developing new retail outlets.
 The fourth strategy controls the communications process
between the company and its customers. Methods of
advertising and audiences to be targeted are just two of the
issues that a communications strategy should address.

The strategies created by a company under its marketing plan are


affected by or affect other aspects of the business plan. For
instance, a business’s decision to expand into new markets by
acquiring a company already selling in the new market might be
hampered by a lack of capital to complete the transaction. It might
force the company to seek additional capital by adding investors or
borrowing money.

 Operations Plan
 The operations plan is closely tied to the team and
management plan section of a business plan. An operations
plan is the engine that runs the machine you call a business.
Without an operations plan, nothing else in your business
plan will get done. The operations section of a business plan
created to obtain bank financing or some other external
purpose does not require the details to go into a plan that will
guide ownership and management in running the business.
 This section should be crammed with details and instructions
to direct people within the business’s day-to-day operations.
The personnel covered in the team and management plan
section of a business plan should refer to the operations plan
to carry out the strategies and tasks needed to run the
business.
 An effective way of including an operations plan when writing
a business plan is to combine it into a single section entitled
“Operations and Management Plan.” Writing the section
begins with creating an organization chart showing each
business member’s title, duties and responsibilities, and
supervisory role.

 Appendix

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