Starting a business that will be successful in the long run is a difficult task. It is critical to make the most of this process in order to achieve the best possible outcome.
According to statistics, roughly 20% of all new business ventures fail within the first 24 months. Only 25% of those who remain active life to the age of ten. The fundamental reason for this is that the project is not preceded by thorough industry analysis.
This implies that the majority of failed business ventures were doomed from the start. Most people do not conduct extensive research into the industry in which they wish to work. Clearly, this is a major blunder, and business owners must recognize the significance of industry analysis.
Opportunities in technology exist in a variety of industries.
Every day, we see how technology is transforming our world. From dating to grocery shopping, it's difficult to imagine a facet of life that hasn't been influenced by technology. That is to say, you would be equally well-served by investigating opportunities in modern healthcare, automobiles, retail, agriculture, or any other industry.
Here are some examples of technology opportunities in these industries:
Automotive: Vehicle connectivity with artificial intelligence and driving simulations in augmented reality.
Retail: Autonomous checkout systems in retail, augmented reality clothing stores, and artificial intelligence
Healthcare: Telemedicine that incorporates augmented and virtual reality features.
Agriculture: Farming software with GPS optimization and AI-powered moisture and temperature sensors.
How should an industry analysis be carried out?
Once you've made a decision, there are a number of steps involved in conducting an industry analysis. Begin by conducting a thorough background search on the industry or a subset of it, and then collect, analyze, and compare data to help answer market-related questions.
In addition, you should use the following commonly used and important methods to ensure a reliable outcome.
Competitive analysis
Within any industry, competition is always a factor. Analyzing the industry using one of the most famous models developed in 1980, also known as 'Porter's 5 forces,' first introduced in Michael Porter's book "Competitive Strategy: Techniques for Analyzing Industries and Competitors," provides an acute impression of the industry and simplifies the analysis.
These five steps are as follows:
Industry rivalry intensity – The number of industry participants and their respective market shares are a direct reflection of the industry's competitiveness. Lack of product differentiation tends to increase competition intensity. Exit costs that are prohibitively expensive, such as high fixed assets, government regulations, labour unions, and so on, make it more difficult for competitors to win.
Potential entrants – This shows how simple it is for new businesses to enter a specific industry's market. Companies face a constant threat from new competitors if it is simple to enter an industry. When an entry is difficult, the firm with the smallest competitive advantage benefits for a longer period of time. When entering a difficult market, businesses must contend with a consistent set of competitors.
Supplier bargaining power – This refers to a supplier's bargaining power. When an industry is reliant on a small number of suppliers, the suppliers wield considerable bargaining power. This is especially problematic for small businesses because it has a direct impact on the quality and pricing of the final product.
Buyer bargaining power – When customers have bargaining power, the outcome is the polar opposite. When consumers/buyers have bargaining power, they can negotiate lower prices, higher quality, or additional services and discounts. This is true in an industry with a larger number of competitors but a single buyer who accounts for a sizable portion of the industry's revenue.
The threat of substitute goods/services – Because every industry's products compete with similar substitute products from other industries, any firm within that industry will face competition from other industries, reducing profitability because it cannot charge exorbitant prices. It is possible to substitute two types of products: those of similar quality/function but lower cost, and those of the same price but higher quality.
PEST Analysis
Political: Understanding the political environment in your industry is critical for success. This entails learning everything you can about the legal policies and regulations that may affect your venture, such as taxes, labour laws, political stability, and so on.
Economic: Everything concerning economic growth, inflation, unemployment, interest rates, and so on. This will all have an impact on your business, and you must consider each factor.
Social: Factors relating to your company's social impact. This includes cultural constraints, education level, customer demographics, behavioural trends, and overall lifestyle.
Technological: This is also important, as you must consider how technology will impact your business. The consequences could be both negative and positive, depending on the advancements and developments that change how a business operates and how people live their lives. The majority of the time, technology will be an advantage.
SWOT Analysis
Strengths: Consider what strengths your company possesses and how those strengths are perceived by third parties, as well as what you do well and what distinguishes your company.
Weaknesses: It is critical to identify what your competitors are doing better and to match or exceed their performance. Recognize what your competitors are doing well in your current business strategy.
Opportunities: Identifying market opportunities, leveraging your strengths, and capitalizing on current trends are all critical components of your venture.
Threats: In addition to understanding how your competitors are affecting your business, you should examine the mistakes and threats that could have a negative impact over time.
The modern world is ruled by technology!
We live in a time when technology is the most relevant and powerful business tool available. It is critical that we learn to recognize this as the most important aspect of our modern-day strategies.
Software solutions that can be applied to any business problem are required for business solutions. A critical aspect of investing in useful technology is determining the best course of action to take in order to find the best solution to this problem. This could have a significant impact on a company's competitive advantage.
Collaboration with a reputable software development firm
Choosing a reputable software development company is critical to getting your project off to a good start. It is critical to be able to obtain the appropriate advice to help you fine-tune your efforts.
Ensure that the development team you hire understands your industry. Furthermore, they should have prior experience working with start-ups to assist you in making the best decision. This type of project should ideally be handled by a team with relevant experience.
Finally, some thoughts on industry analysis.
When starting any type of business, there are numerous factors that must be considered. If you want your business to be successful in the long run, you should prioritize industry research.
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