Difference between industry & market analysis

Written by renee o'farrell | 13/05/2017

Industry analysis and market analysis are two different ways to look at the environment in which a company competes. Although related, these two types of analysis differ in their scope.

Industry analysis

Industry analysis looks at long-term trends and economic forces that affect the overall industry. Industry analysis is commonly performed within the framework of Michael Porter’s "Five Forces," a theory used to assess the structure of an industry.

Five Forces

Porter identified the following forces that affect an industry: bargaining power of suppliers; bargaining power of buyers; threat of new entrants; threat of substitutes (products or services that may be used instead of those in question; also called replacement products); and rivalry among competitors.

Market Analysis

Market analysis considers the “market” the company operates in. It asks questions like, “ What features are important to the target customer?” “How can I cause the target customer to buy this company’s product, instead of another’s?” “What marketing vehicles will attract and engage the target customer?”

Finding a Niche

An integral part of market analysis is identifying “who” the target customer is, meaning the sort of person the product or service appeals to most. Also called a “niche”, it is typically expressed as a demographic. For example, the niche market for iPads could be young professional urbanites in two-income homes.


Competition is examined in both industry and market analysis, and both types of analysis are important in understanding the competition a company faces. However, the scopes differ. In industry analysis, competition is examined at the industry level in terms of all the possible competition out there: companies that make the same product (i.e., candles), or make a product that fills the same need (i.e., gifts). Market analysis looks specifically at the competition that exists relative to the target market (i.e., designer candles, Yankee candles and scented candles).

By using the eHow.co.uk site, you consent to the use of cookies. For more information, please see our Cookie policy.