Industry Analysis: the bigger picture
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Industry Analysis: The Bigger Picture July 2013 ©David Mayes 1
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Industry analysis is not well understand. As a discipline it sits between macro economic analysis and market analysis, and uses tools from both. It is an important tool for governments, regional development agencies, investors and companies. Those who can anticipate the changes in an industry are more likely to be successful
Transcript of Industry Analysis: the bigger picture
Industry Analysis: The Bigger Picture
July 2013
©David Mayes 1
Industry Analysis: The Bigger Picture
David Mayes, Lecturer
©David Mayes 2
Introduction
1. Lecturer Introduction
2. What is Industry Analysis?
3. Why Industry Analysis?
4. Suggested Reading
Industry Analysis:
The Bigger Picture
©David Mayes 3
Lecturer Introduction
©David Mayes 4
Industry Analysis:
The Bigger Picture
Industry Analysis
Lecturer Introduction
David Mayes:
LinkedIn Profile: http://www.linkedin.com/in/mayo615
Google+ Profile: https://plus.google.com/u/0/118299264663896711410/about
Email: [email protected]
UBC Office: EME 4157 (250) 807-9331 Hours: Thurs. 12PM – 2PM or by appt.
Cellular: (250) 864-9552
Twitter: @mayo615
Experience:
Executive management, access to venture capital, international business development,
sales & marketing, entrepreneurial mentorship, technology assessment, strategic planning,
renewable energy technology.
Intel Corporation, 01 Computers Group (UK) Ltd., Mobile Data International, Silicon
Graphics, Sun Microsystems, Ascend Communications, P-Cube, Global Internet Group
LLP, New Zealand Trade & Enterprise.
©David Mayes 5
Introduction
1. Instructor Introduction
2. What is Industry Analysis?
3. Why Industry Analysis?
4. Suggested Reading
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Industry Analysis:
The Bigger Picture
What is Industry Analysis?
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Industry Analysis:
The Bigger Picture
Industry Analysis
What is Industry Analysis?
A Proposed Definition of Industry Analysis:
Industry analysis looks at long-term trends and forces that affect an
overall industry.
It is a strategic analysis tool used by governments, economic development
agencies, financial services & investment firms, management consultancy
firms, and businesses. Current estimates and future industry projections
may include consideration of a broad range of global and local factors:
economic, supply and demand, individual competitors, other external
future forecasts, and government policy affecting the industry.
Industry analysis is commonly performed within the framework of macro-
economic analysis as well as market analysis theories and tools.
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Industry Analysis
What is Industry Analysis?
Industry Analysis As A Discipline:
• Best known in the financial services industry • Industry performance & forecast guides for investors
• High profile industry analysis consultancy firms • IDC, Gartner, Forrester, dozens of others in vertical markets
• Used as a strategic planning tool by companies
• “How to” guides/textbooks very limited, but
masses of primary statistics and reports • Seen as between macro-economics and market research
©David Mayes 9
Macro Economy:
Global, Regional, National
An Industry:
Global, Regional, National
A Market:
Can Be Industry Sub-segment(s)
Competitor(s)
Us
Industry Analysis
What is Industry Analysis?
Hierarchy of Economic Analysis
OUR FOCUS
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Industry Analysis
What is Industry Analysis?
IDC Forecasts Worldwide Semiconductor Revenues Will
Reach $305 Billion in 2012
IDC Forecasts Worldwide Semiconductor Revenues Will Reach $305 Billion in 2012
Business Wire FRAMINGHAM, Mass. -- December 15, 2011
“Despite the continuing global macroeconomic problems, semiconductor inventory overbuild early this year,
and current DRAM oversupply, semiconductor revenues will register positive year-over-year (YoY) growth
of 3.4% and 3.1% with $296billion and $305 billion for 2011 and 2012, respectively, according to the
year-end 2011 update of IDC's Semiconductor Application Forecaster (SAF)."The 2011 year-end update
reaffirms the views IDC expressed in its qualitative SAF update published in November 2011….”
Yada yada yada…
Full Report Price: $1,000, other reports up to $10,000
Industry Analysis Example
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Industry Analysis
What is Industry Analysis?
http://www.youtube.com/watch?v=31SpS3
6ynDs&hd=1
Semiconductor Industry Analysis:
Intel Cuts 2012 Outlook on Hard Drive Shortage
(Flood in Thailand)
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Industry Analysis
What is Industry Analysis?
http://www.youtube.com/watch?v=-
I50V4PO1y4&feature=g-
wl&context=G25b6f51AWAAAAAAAAAA
Information Technology Industry
Analysis:
Samsung Economic Research Institute
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Industry Analysis
What is Industry Analysis?
http://www.economist.com/node/21541746
The Economist on Video Gaming:
World of Warcraft vs. New Market Entrants
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Industry Analysis
What is Industry Analysis?
http://www.dailymotion.com/video/xblts0_in
dustry-analyst-jesse-divnich-on-
v_videogames
Video Gaming Analyst Jesse Divnich
on the Video Games Industry
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Industry Analysis
What is Industry Analysis?
Answer: Huge consumption of microprocessors for game
consoles
“Over the past two decades the video-games business has gone from a
cottage industry selling to a few niche customers to a fully grown branch of the
entertainment industry. According to PricewaterhouseCoopers (PwC):
• Global video-game market worth around $56 billion last year.
• More than twice the size of the recorded-music industry
• Three-fifths the size of the film industry, Including DVD sales
Video games will be the fastest-growing form of media over the next few
years, with sales rising to $82 billion by 2015.”
-- The Economist. December 10th, 2011
How Does The Video Games Market Relate to the
Semiconductor Industry?
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Industry Analysis
What is Industry Analysis?
Leading Industries in Canada (GDP):
• Aerospace (5th largest in the World)
• Agri-food (4th largest exporter)
• Automotive (3rd largest exporter in World)
Leading Industries in British Columbia (GDP):
• Construction
• Manufacturing (?)
• Mining & Gas Extraction
Leading Industries in the Thompson Okanagan (GDP):
• Construction
• Manufacturing
• Services (retail, tourism, etc.)
Key Industries in Canada
©David Mayes 17
Questions?
What is Industry Analysis?
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Industry Analysis
1. Instructor Introduction
2. What is Industry Analysis?
3. Why Industry Analysis?
4. Suggested Reading
©David Mayes 19
Industry Analysis:
The Bigger Picture
Industry Analysis
Why Industry Analysis?
ANSWER:
Large scale economic shifts caused by demographic,
geographic, political, technological and social changes
can create new opportunities or can lead to the demise of
a company.
Competitors that can anticipate these large-scale
economic shifts are more likely to survive.
Why Industry Analysis?
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Industry Analysis
Why Industry Analysis?
• Government Policy • Taxation, incentives, international export market development
• Focused Economic Development Programs • Which industries should be promoted?
• Example: New Zealand Trade & Enterprise*
• Institutional/Individual Investment Management
• Tracking Industry Trends and Growth • Management Consultancy Firms
• Strategic Business Decisions on Markets • Individual businesses
Why Industry Analysis?
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Industry Analysis
Why Industry Analysis?
• Federal, Provincial Ministries & Economic Development Agencies • Canadian Ministries of Industry and International Trade
• BC Ministry of Energy, Mines and Petroleum
• Central Okanagan Regional Development
• Financial Services and Investment Firms • BMO, CIBC, RBC, TD Canada Trust, credit unions
• Stock brokerages
• Financial news networks
• Management Consultancy Firms • Accenture, BCG, HP, IBM, PWC, Forrester, Gartner, IDC
• Businesses • Executive management, strategic planning units
• Corporate positioning, SWOT, long range planning
Who Conducts and Uses Industry
Analysis?
©David Mayes 22
Industry Analysis
Why Industry Analysis?
Example:
New Zealand Trade & Enterprise
Marketing an Entire Nation as an Industry
http://www.nzte.govt.nz/Pages/default.aspx
http://www.youtube.com/watch?v=eh-0knDpn5g
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Industry Analysis
Why Industry Analysis?
Example: International Data Corporation
(IDC)
http://www.idc.com/prodserv/maps/consumer.jsp
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Industry Analysis
Why Industry Analysis?
Example: Central Okanagan Economic
Development Commission
http://investkelowna.com/
©David Mayes 25
Questions?
Why Industry Analysis?
©David Mayes 26
Industry Analysis
1. Instructor Introduction
2. What is Industry Analysis?
3. Why Industry Analysis?
4. Suggested Reading
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Industry Analysis:
The Bigger Picture
Industry Analysis
Suggested Reading:
Suggested Reading:
HBR’s 10 Must Reads on Strategy, Harvard Business Press, 2011 (HBR
article anthology).
Blue Ocean vs. Five Forces, Burke, A.E. (HBR journal article, online)
http://toby.library.ubc.ca/subjects/subjpage2.cfm?id=660
How to Conduct An Industry Analysis, Small Business and Technology
Development Center, http://www.sbtdc.org/pdf/industry_analysis.pdf
©David Mayes 28
©David Mayes 29
