Industry and Market Research

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The term business model refers to a company's plan for making a profit. It identifies the products or services the business plans to sell, its identified target market, and any anticipated expenses. Business models are important for both new and established businesses. They help new, developing companies attract investment, recruit talent, and motivate management and staff. Established businesses should regularly update their business plans or they'll fail to anticipate trends and challenges ahead. Business plans help investors evaluate companies that interest them.

An industry is a group of companies that are related based on their primary business activities. In modern economies, there are dozens of industry classifications. Industry classifications are typically grouped into larger categories called sectors.

A market leader is a company with the largest market share in an industry that can often use its dominance to affect the competitive landscape and direction the market takes. A market leader typically enjoys the largest market share or the largest percentage of total sales in a given market. It may surpass its competitors according to other metrics, too, including brand loyalty, perceived value, distribution coverage, image, price, promotional spending, and profit.

Market share is the percent of total sales in an industry generated by a particular company. Market share is calculated by taking the company's sales over the period and dividing it by the total sales of the industry over the same period. This metric is used to give a general idea of the size of a company in relation to its market and its competitors. The market leader in an industry is the company with the largest market share.

A sector is an area of the economy in which businesses share the same or related business activity, product, or service. Sectors represent a large grouping of companies with similar business activities, such as the extraction of natural resources and agriculture.

A target market is a group of people with some shared characteristics that a company has identified as potential customers for its products. Identifying the target market informs the decision-making process as a company designs, packages, and markets its product.