The document discusses various tools and methods for analyzing industries, including qualitative and quantitative approaches. Qualitative approaches include analyzing the strengths, weaknesses, opportunities, and threats (SWOT) of an industry and its competitive landscape over the industry life cycle. Quantitative approaches include analyzing employment data, emolument (pay) data, and input-output relationships to understand industry performance and risk over time. The goal of industry analysis is to identify investment opportunities and understand how industries will perform in the future economic environment.

1. INDUSTRY ANALYSIS Narender Bansal MBA 3 rd Semester Maharaja Agrasen Institute of Technology Delhi-110086

2. Industry Analysis After economic analysis, we ask the question “which industries will benefit most from the upcoming economic environment?” This will lead to several industries, and our analysis will lead us to choose the one that we find to be best positioned.

3. What is an Industry?

4. INDUSTRY GROUPS AGRICULTURE STEEL HEALTH CARE RETAIL AUTOMOBILES PHARMACEUTICAL FINANCIAL SERVICES HOTEL & TOURISM IT TELECOM UTILITIES PAPER & PRINTING BANKING FMCG INFRASTRUCTURE TEXTILE OIL AND GAS EXPLORATION

5. SIC Code ECONOMIC SECTOR Manufacturing Distribution Services PRODUCT AND SERVICES List of what is offered by the industry GEOGRAPHIC SCOPE Local ,Regional, National, International

6. Computer industry Different Market Segments Personal Computer Micro Computer Mini Computer Mainframe Computer

7. Furniture industry Home Furniture Office Furniture Wooden Hosehold Metal Household

8. Industry Analysis tries to find out following answer Difference between return for alternate industries Future performance of currently performing companyin one period Consistent performance over time Risk difference between different industries Risk variability over period of time

9. ECONOMY AND INDUSTRIAL SECTORS The economic performance of a country,to a large extent,determine Favourable and unfavourablable climate for its industrial participation

10. Reasons of industrial analysis Provide an awareness of market performance Identify investment opportunities Important part of company’s business plan Financial institutions

11. Data Requirement Product Line Complementry Product Product Growth Product Pattern (Seasonal,Cyclical) Econimies of Scales Suppliers Labour Market Buyer and their Behaviour Substitute Product Prices Marketing and Selling Cost Structure Logistic Department of Economic Analysis , Business Publication

12. Industrial Life Cycle It is Rise and Fall in Customer Interest

13. Industrial Life Cycle Rise and Fall of Customer Interest Depend on extent of technology and innovation Each phase passes from four stages Introduction Stage Growth Stage Maturity Stage Stability/Decline Stage

15. Feature of Industrial Life Cycle Marketing Manufacturing Competion Risk Margin Strategy High Advertising Skimming Pricing Under Capacity High Production Cost Low High High but low profit Increase Market Share High Advertising Under Capacity Shift to High Production Many Competitor Groth Vs Risk High and High Profit High Prices Change Quality &Price Image Market Segmentation Services Optimum Capacity Price Competition Low Low due to price war Marketing Effectiveness Low Advertising Overcapacity, Mass Production Exit,Fewer Very High Risk Low Profit Cost Control Introduction Growth Maturity Decline

16. TOOLS FOR INDUSTRY ANALYSIS Qualitative Cross sectional industry performance Industry performnce overtime Difference in industry risk SWOT analysis Competition over industry life cycle Quantitative Analysing employment data Analysis of emolument data Input output analysis Earning data analysis

17. Cross sectional industry performance Aimed at finding out variability in Rate of return among various industries in given time period compare performance in term of Sale profit market capitalisation dividend

18. Example Stock market growth=10% Industrial growth rates = 5% to 8% Stock market growth=50% Industrial growth rates = 80% to - 20%

19. Industry performance over time To identify stage of product life cycle Time duration 3 to 5 year Difficult to forecast future performance due to compositional change in industry technological change innovation

20. Differences in industry risk Besides focussing on return also consider risk Specifically investigate two question Does risk differ across industries in given time period Are industry risk stable over time Measured in term of variability in return/productive value Risk pattern also depend on economic situation

22. SWOT ANALYSIS Strenth & weakness Assess strenth and weakness Internal capability of industry Competitive advantage or defensive against weakness Opportunity & threat Evaluate opportunity and threat Environmental trend External situation Competitive forces Technology Government regulation

23. SWOT analysis STRENTH Capicity Competitive advantage Good custermor service High quality product Customer loyality Financial resources WEAKNESS Limitation default defect Competitor has exploitable advantage Example: Small scale industry hs poor financial resources Industry that cater domestic market, would have weakness of catering to global market

24. SWOT analysis Opportunity Favourable condition in environment May be trend or need Growing market of industry product Shrinking competition Identification of new market Threat Unfavourable situation May be barrior or constraint Slowing domestic economy Competition New entrant New technology

25. SWOT analysis Threat Opprtunity Strenth Weakness Internal environment External environment Confront Avoid Exploit Search

26. Analysing Employment data Life cycle can be predicted by Product life cycle Help in identify key industries Identify growth and decline Evaluate importance of industry to economy DetermineCompetitiveness among industries

27. Data Requrement Industry wise total employment in current as well earlier years Industry wise total emolument data in current as well earlier years Employes: Who receive wge and hold clerical superwisery post Duration of analysis Short : Changing environment Long : Predictive purpose Base year

28. Employment share of sub industry = Employment in sub industry *100 Total employment in industry Employment in wools=2000 Total in textile =11500 % Share =2000/11500*100 ie 17.39% Change in employment Current yr no. Of employes _1 *100 Base yr no. Of employes Current employes:1500 Base yr employes:1200 % change : [(1500/1200)-1]*100 ie 25 %

29. Location quotient: Measure concentration of industry’s concentratio in an area relative to rest of nation Industry location quotient Industry share of regional employment Industry share of national employment or Industry’s regional employment Total national employment Industry national employment Total national employment % change in location quotient [ (Current yer LQ/Base yr LQ)1 ] *100 LQ = location quotient

30. Employment shift analysis Current yr total national employment - 1 Base yr total national employment Base yr total national employment National avarage growth rate Industry avarage growth rate Regional industry base year employment * national avg growth rate

31. Emolument Data Sum of wages and salaries,employer’s contribution to provident fund And other fund and workmen and staff welfare expenses Emolument per employ= Industry regional emolument Industry regional emolument

32. Change in emolument per employe by industry Current yr emolument per employe Base yr emolument per employe -1 * 100

33. Input output analysis Total input Include value of fuel,material consumed,expenditure,repair costtaxes,,postage,banking charges Total output value of product byproduct