What Do You Understand By Industry Environment?


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Meg Hayes answered
Industry environment is a particular type of analysis that usually takes place as the second stage of any strategic analysis conducted by a business. The purpose of an industry environment analysis is to figure out what competitive pressure that your business will be likely to come across in the near future.

The manager or leader of a good business must be aware of and understand the forces that are at work in the industry environment and they must also have spent time coming up with any possible replies to any perceived threats or opportunities.

When the manager or leader of a business is conducting the analysis, they should be considering the following examples of questions as well as many others:
  • How profitable will the industry be in the future?
  • Is there going to be an increase or decrease in the level of competition in this part of the industry?
A business leader will be required to analyze and gain a complete understanding of the situation that their industry is in. They will also need to use the knowledge that they gain productively, to reduce the possible effect of competition in that industry.

Conducting an industry environment analysis will also help out a business in the future, as it will greatly contribute to the leader's skills when it comes to leading and navigating their business towards a successful and profitable future. By doing an analysis, the manager will be able to apply this industry knowledge that they have gained to situations they will encounter daily, as well as encouraging and motivating members of staff and building on company spirit.

If you are a business leader and are unsure how you should go about conducting an industry environment analysis, get in touch with people who work above you who will be able to give you some advice. By following their guidelines, you will be able to steer your company towards a better future, as well as becoming a better leader.

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