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    Industry Analysis by AA

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    Md Zahidul Islam
    This document provides an overview of industry analysis for capital market investment decisions. It discusses why industry analysis is important, including evaluating the business cycle, structural economic changes, and an industry's life cycle. It also outlines several tools for industry analysis, including market share analysis, the Herfindahl-Hirschman Index, Porter's Five Forces model, PEST analysis, and life cycle analysis. The document explains how these tools can be used to analyze sectors, find the intrinsic value of companies, and make informed investment decisions.

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    Industry Analysis by AA

    Uploaded by

    Md Zahidul Islam
    8 views29 pages
    This document provides an overview of industry analysis for capital market investment decisions. It discusses why industry analysis is important, including evaluating the business cycle, structural economic changes, and an industry's life cycle. It also outlines several tools for industry analysis, including market share analysis, the Herfindahl-Hirschman Index, Porter's Five Forces model, PEST analysis, and life cycle analysis. The document explains how these tools can be used to analyze sectors, find the intrinsic value of companies, and make informed investment decisions.

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    This document provides an overview of industry analysis for capital market investment decisions. It discusses why industry analysis is important, including evaluating the business cycle, structural economic changes, and an industry's life cycle. It also outlines several tools for industry analysis, including market share analysis, the Herfindahl-Hirschman Index, Porter's Five Forces model, PEST analysis, and life cycle analysis. The document explains how these tools can be used to analyze sectors, find the intrinsic value of companies, and make informed investment decisions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    8 views29 pages

    Industry Analysis by AA

    Uploaded by

    Md Zahidul Islam
    This document provides an overview of industry analysis for capital market investment decisions. It discusses why industry analysis is important, including evaluating the business cycle, structural economic changes, and an industry's life cycle. It also outlines several tools for industry analysis, including market share analysis, the Herfindahl-Hirschman Index, Porter's Five Forces model, PEST analysis, and life cycle analysis. The document explains how these tools can be used to analyze sectors, find the intrinsic value of companies, and make informed investment decisions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 29

    Bangladesh Institute of Capital Market

    Investors’ Education Program


    Industry Analysis for Capital Market Investment Decision

    1
    Md. Adnan Ahmed
    [MBA and BBA from University of Dhaka]
    Lecturer
    Bangladesh Institute of Capital Market
    Contact: +880167-5186443
    Mail: [email protected]

    2
    Why Industry Analysis is Important ?

    ❑The business cycle and industry sectors

    ❑Structural economic changes and alternative industries

    ❑Evaluating an industry’s life cycle

    ❑Analysis of the competitive environment in an industry


    What shapes an industry/sector ?

    ❑Product Types

    ❑Demographics

    ❑Lifestyle

    ❑Scale of operation
    Industry Analysis Tools

    1. Market Share Analysis

    2. Herfindahl-Hirschman Index (HHI)

    3. Porter’s Five Forces Model

    4. PEST Analysis

    5. Life Cycle Analysis


    Why do we do Industry Analysis ?

    Economy Analysis
    Macroeconomic Analysis, Sector Evaluation, Country
    Growth

    Industry Analysis
    Industry Growth, Industry Performance,
    Future Potential

    Company
    Analysis

    Finding the Intrinsic Value


    Sector-Wise Companies
    Travel & Leisure 4
    Textile 58
    Telecommunication 3
    Tannery Industries 6
    Services & Real Estate 4
    Pharmaceuticals & Chemicals 33
    Paper & Printing 6
    Mutual Funds 37
    Miscellanous 14
    Jute 3
    IT Sector 11
    Insurance 57
    G-Sec (T Bond) 240
    Fuel & Power 23
    Food & Allied 21
    Financial Institutions 23
    Engineering 42
    Debenture 8
    Corporate Bond 11
    Ceramics 5
    Cement 7
    Bank 35
    0 50 100 150 200 250 300
    How to Analyze Sector

    1) Market Share Analysis

    2) Herfindahl-Hirschman Index (HHI)

    3) Porter’s Five Forces

    4) PESTLE Analysis

    5) Industry Cycle Analysis

    8
    1. Market Share Analysis

    Market share is the percent of total sales in


    an industry generated by a particular company

    Gives a general idea of the size of a company


    in relation to its market and its competitors.

    9
    Market Share Analysis

    10
    Calculation of Market Share Analysis

    Total Market Size: Assume the total market size for Market Share (%)
    smartphones in a particular region is 10 million units.
    Company A: 30 30
    •Company A sold 3 million smartphones in the last year.
    •Market Share for Company A = (3,000,000 / 10,000,000) * 100 = 30%
    Company B:
    •Company B sold 4 million smartphones in the last year.
    •Market Share for Company B = (4,000,000 / 10,000,000) * 100 = 40%
    Company C:
    •Company C sold 2 million smartphones in the last year. 40
    A B C
    •Market Share for Company C = (3,000,000 / 10,000,000) * 100 = 30%
    11
    2. Herfindahl-Hirschman Index (HHI)

    A common measure of market concentration and is used to determine market competitiveness

    The index measures the size of companies relative to the size of the industry they are in and
    the amount of competitiveness

    Measures the degree of concentration within a specific market

    12
    Calculation of Herfindahl-Hirschman Index (HHI)
    It can range from close to 0 to 10,000, with lower values indicating a less concentrated market.

    Competitive: <1,500

    Moderately Concentrated: 1500 – 2500

    Highly Concentrated: >2500

    ​where:
    sn​=the market share percentage of firm n expressed as a whole number, not a decimal​
    13
    14
    3. Porter’s Five Forces

    15
    4. PESTLE Analysis

    27
    5. Industry Cycle Analysis

    28
    Thank You !

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