**Additional References for Business Plan Writing** Industry Analysis     Industry analysis is business research that focuses on the potential of an industry. An industry is a group of firms producing a similar product or service, such as music, fitness drinks, or electronic games. Once it is determined that a new venture is feasible in regard to the industry and market in which it will compete, a more in-depth analysis is needed to learn the ins-and-outs of the industry the firm plans to enter. When studying an industry, an entrepreneur must answer three questions before pursuing the idea of starting a firm. i. First, is the industry accessible – in other words, is it a realistic place for a new venture to enter? ii. Second, does the industry contain markets that are ripe for innovation or are underserved? iii. Third, are there positions in the industry that will avoid some of the negative attributes of the industry as a whole? It is useful for a new venture to think about its position at both the company level and the product or service level. At the company level, a firm’s position determines how the entire company is situated relative to its competitors.

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\\Industry vs. Firm Level Factors   To illustrate the importance of the industry a firm chooses to enter, research has shown that both firm- and industry-specific factors contribute to a firm’s profitability. In various studies, researchers have found that from 8 to 30 percent of the variation in firm profitability is directly attributable to the industry in which a firm competes.

\\Studying Industry Trends a. Environmental Trends  Economic trends, social trends, technological advances, and political and regulatory changes are the most important environmental trends for entrepreneurs to study. b. Business Trends  Other trends impact industries that aren’t environmental trends per se but are