Stage 1: Industry Overview

This Industry Overview serves two purposes. First, it provides senior management with a framework within which the business will operate. Second, it provides outside readers such as investors, who have no detailed knowledge of the industry with all the pertinent information they require to properly asses where this individual business fits within the industry. It is unreasonable, and potentially dangerous, to assume the reader of your business plan has any knowledge of the Industry.

This section will provide an overview of the external environment and includes a assessment of the following factors:

  1. The industry's dominant economic features, including its size, stage of the business cycle, etc.
  2. The strength of the five competitive forces facing industry participants: strength of rivalry between competing firms, threat of substitute products, threat of new entrants, bargaining power of major suppliers, and the bargaining power of buyers.
  3. The factors that drive industry change, such as technology change, market innovation, regulatory influences, changing societal concerns, etc.
  4. The market positions that rivals occupy, and which rivals have the strongest position, and which do not
  5. The key factors for future competitive success, and how well competing firms are able to deliver on these key success factors
  6. The outlook for the industry and whether it can provide the business with an attractive opportunity

If your new product is a technology product you will want to assess the following factors.

  1. State-of-the-art
  2. Competitive Intelligence

The checklists that are provided are intended to provide a starting point for your review. As such, they are not intended to be a comprehensive list. Also, many of the questions may not be applicable to your specific business. You should be prepared to add or to remove those questions that are not relevant to your business. As you answer each question, decide whether this aspect of the industry is an opportunity (O) or threat (T). Check the appropriate box to keep score of your decisions.