{"id":1948,"date":"2019-06-15T17:35:00","date_gmt":"2019-06-15T17:35:00","guid":{"rendered":"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=1948"},"modified":"2025-12-23T13:30:06","modified_gmt":"2025-12-23T13:30:06","slug":"elements-covered-thorough-industry-analysis","status":"publish","type":"post","link":"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/elements-covered-thorough-industry-analysis\/","title":{"rendered":"Elements Covered in a Thorough Industry Analysis"},"content":{"rendered":"\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"VideoObject\",\n  \"name\": \"Introduction to Industry and Company Analysis (2025 Level I CFA\u00ae Exam \u2013 Equity \u2013 Module 5)\",\n  \"description\": \"This video lesson covers key Level 1 CFA learning outcomes on industry and company analysis. It explains industry classification systems, methods for grouping companies, business cycle sensitivity, strategic industry analysis, barriers to entry, industry life cycles, macroeconomic and environmental influences, and elements of comprehensive company analysis.\",\n  \"uploadDate\": \"2022-05-12T00:00:00+00:00\",\n  \"thumbnailUrl\": \"https:\/\/i.ytimg.com\/vi\/labqtlwTF_c\/hqdefault.jpg\",\n  \"contentUrl\": \"https:\/\/www.youtube.com\/watch?v=labqtlwTF_c\",\n  \"embedUrl\": \"https:\/\/www.youtube.com\/embed\/labqtlwTF_c\",\n  \"duration\": \"PT41M53S\"\n}\n<\/script>\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"QAPage\",\n  \"mainEntity\": {\n    \"@type\": \"Question\",\n    \"name\": \"Which of the following is most likely to be covered in a thorough industry analysis?\",\n    \"text\": \"Which of the following is most likely to be covered in a thorough industry analysis?\\n\\nA. A comparison of the stock price performance of various firms within the industry.\\nB. The current positioning of the industry and the various entities that may be a catalyst for change within the industry in the future.\\nC. A detailed history of the industry, including analysis of firms that used to compete in the industry, but have since gone out of business or have been acquired.\",\n    \"answerCount\": 1,\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"The correct answer is B. A thorough industry analysis typically focuses on the current positioning of the industry and the key factors that may shape its future, rather than just historical data or stock price performance.\"\n    }\n  }\n}\n<\/script>\n\n\n\n<iframe loading=\"lazy\" width=\"560\" height=\"315\" src=\"https:\/\/www.youtube.com\/embed\/labqtlwTF_c?si=YJ8QIHvorLMhxeIU\" title=\"YouTube video player\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n\n\n<p>\u00a0<\/p>\n<p>Thorough industry analysis will often split the industry into strategic groups (groups sharing distinct business models or catering to specific market segments in an industry). The analysis will likely involve identifying the industry\u2019s life-cycle, usually placing the industry somewhere along the experience curve. The experience curve shows the direct cost per unit of good or service produced or delivered as a typically declining function of cumulative output.<\/p>\n<p>A thorough analysis will probably also delve into the range of forces that may affect the industry&#8217;s evolution, including macroeconomic, demographic, governmental, social, and technological influences.<\/p>\n<p>Finally, the competitive landscape should also be explored, including the forces driving industry competition (threat of new entrants, substitution threats, customer and supplier bargaining forces).<\/p>\n<blockquote>\n<h3><strong>Question<\/strong><\/h3>\n<p>Which of the following is <em>most likely<\/em> to be covered in a thorough industry analysis?<\/p>\n<ol style=\"list-style-type: upper-alpha;\">\n<li data-tadv-p=\"keep\">A comparison of the stock price performance of various firms within the industry.<\/li>\n<li data-tadv-p=\"keep\">The current positioning of the industry and the various entities that may be a catalyst for change within the industry in the future.<\/li>\n<li data-tadv-p=\"keep\">A detailed history of the industry, including analysis of firms that used to compete in the industry, but have since gone out of business or have been acquired.<\/li>\n<\/ol>\n<p><strong>Solution<\/strong><\/p>\n<p>The correct answer is <strong>B<\/strong>.<\/p>\n<p>Stock price performance and historical understanding may certainly be relevant in analyzing an industry at times, but the focus of the analysis will typically be on the industry\u2019s present positioning and future prospects.<\/p>\n<\/blockquote>","protected":false},"excerpt":{"rendered":"<p>\u00a0 Thorough industry analysis will often split the industry into strategic groups (groups sharing distinct business models or catering to specific market segments in an industry). The analysis will likely involve identifying the industry\u2019s life-cycle, usually placing the industry somewhere&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-1948","post","type-post","status-publish","format-standard","hentry","category-equity","blog-post","no-post-thumbnail","animate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Key Components of Industry Analysis | CFA Level 1<\/title>\n<meta name=\"description\" content=\"Learn what industry analysis should include\u2014life-cycle stages, competition, and structural factors. 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