Industry Classification

The first part of this section is defining the industry that your company fits into 

and is an important macro identification. A valid test of the industry definition is 

the answer to the question “with whom does your company compete?” Be careful 

that the definition is not too narrow. For instance in the finance industry, Charles 

Schwab is a discount broker and they obviously compete with other discount 

brokers like Quick and Reilly and Fidelity. However, they also compete against full 

service brokers and deep discounters. 

There is also a risk of defining the industry too broadly. For instance, total retailing 

in the U.S. is over $2 trillion a year. This includes everything sold to a consumer–

groceries, automobiles, fast food, clothing, etc. There are sub-sections to the retail 

industry and these provide a better definition since they are consistent with the 

criteria cited above regarding which companies compete against in the market. 

Hence, it would be incorrect to identify your company as part of the hospitality 

industry.

Explain the structure of the industry and identify the dominant companies. Who are 

the current players, their products, their strengths and weaknesses? A chart (which 

is located in the Appendix of your paper NOT within the body) showing the relative 

size of dominant companies compared to your analysis company is often a good 

idea. 

Size and growth

Again, you are not looking at the hospitality but the subset of that industry to 

which your company belongs.

Financial performance in this section deals with the industry and not your specific 

analysis company. How has the industry done in recent years and what are the 

projections for the future. The Value Line publication analysis is a good source for 

this type of information as are trade publications that are devoted to the specific 

industry. This is another opportunity to use a chart to show financial performance 

of the industry over multiple years. Do not deal with quarters but focus on annual 

performance.

Government regulations  

Again, looking at the industry what are the important government regulations (if 

any) that the industry is being forced to examine. Again, NOT the hospitality 

industry.

3-3.5 pages