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Industry OverviewView Template for: Industry Overview The purpose of this section is to present an overview of the industry. It is highly recommended that the overview be kept to one or two pages. A planning document, like most documents, should only be as long as necessary and no longer. Besides providing a general description of the industry, it is important to clearly identify the scope of the industry. This is not always easy. Industry consultants and newspapers frequently site precise figures on industry size and market share by competitors, as if the industry definition were perfectly clear. But especially in non-manufacturing industries it is rare for the industry definition to be clear at all. This is because globalization and advances in technology have blurred the boundaries of most industries. Knowing the exact size of an industry is not always critical. But it is important to clearly define the industry and monitor the growth trends taking place. Defining the scope of an industry includes a description of what is to be included in the industry, and what is not. Industry scope needs to be defined in terms of what products and services are included, what buyer types are included, and what geographical areas of the world are included. It is also helpful to identify complementary products which are not part of the industry. Complementary products to the industry are defined as those products not part of this industry but used in conjunction with the products of the industry. Complementary products help promote the sale of the industry's products (the opposite of a substitute product). For example, auto loans are a complementary product to the car industry. A compact disc is a complementary product to the CD player industry. The industry overview should be written as if written by a Wall Street analyst, business professor, or humble MBA student. A common mistake in the development of many strategic plans is that the `industry analysis' is too narrowly defined in terms of the business unit's position within the industry, and too biased in terms of the business unit's subjective view of the industry. An industry's products and customer types and geographic scope usually extend beyond the focus of the business unit; and industry surveys are usually more reliable than the subjective opinions of the business unit management team. In practice, it is sometimes helpful to initially write the industry overview without mentioning the name of the business unit developing the competitive strategy. This will ensure that the discussion is really about the industry and not just the position or subjective views of the business unit. |
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