Where an industry analysis establishes the scope of the marketplace, a market analysis tells a business owner if a market within a particular industry will be profitable for a company’s product.
A competitor analysis is a process in which a business obtains information to identify and learn more about key competitors in order to be able to predict how the competition will react.
Competitive analysis serves a vital role in strategic planning, so writing a great business plan becomes easier if you do your research before you begin to write your business plan.
A competitor analysis, unlike the competitive rivalry factor of an industry analysis, focuses attention on each competitor’s strengths and weaknesses instead focusing on the overall competitive climate within an industry.
A business plan can be as simple as a few notes scrawled on a paper napkin, or it can be a 40-page document with multiple sections and subsections describing every minute detail of a company’s operations, products and finances.
Writing an effective business plan is easier if you take time before starting the writing process to conduct your research and gather the information you will need to incorporate into it.
You will obtain sufficient information on your industry from the five forces analysis to formulate long- and short-term strategies to incorporate into your business plan.
A business plan for startup companies will benefit from an industry analysis that provides ownership with information to make decisions and formulate policy in certain key areas.
According to Porter, there are five forces that influence all markets and industries.
The five forces are: Porter believed that an analysis of the five forces that exist in every industry could help forecast a company’s ability to compete and remain profitable.