Assessing Industry 
             Assessing Industry 
                      Conditions
                      Conditions
   Copyright © 2004 South-Western. All rights reserved.              5–2
                Learning Goals
                Learning Goals
    •Identify industry conditions that 
     impact business performance.
    •Explain why some firms are more 
     exposed to industry conditions.
    •Explain how a firm can compete in 
     its industry.
   Copyright © 2004 South-Western. All rights reserved.              5–3
     Industry Characteristics
     Industry Characteristics
    •Firm performance can be highly 
     dependent on industry 
     characteristics:
      –Industry demand
      –Industry competition
      –Labor environment
      –Regulatory environment
   Copyright © 2004 South-Western. All rights reserved.              5–4
       Small Business Survey
       Small Business Survey
     Are Firms Affected by 
     Industry Regulations?
    Copyright © 2004 South-Western. All rights reserved.                5–5
            Impact of Industry 
            Impact of Industry 
                        Demand
                        Demand
    •Industry demand
      –Total demand for the products in an industry 
         can be affected by:
         Population growth
         Seasons and weather
         Economic conditions
         Changes in consumer income levels and 
           preferences 
      –Impacts the performance of individual firms 
         in an industry.
   Copyright © 2004 South-Western. All rights reserved.              5–6