According to the total number of enterprises in the industry, the difficulty of entry, and product differences, the market in which the industry operates can be basically divided into four market structures: perfect competition, monopolistic competition, oligopoly, and perfect monopoly.
There are many different methods for industry classification, not only for different countries but also for different securities markets. At present, there are several common methods for industry classification, including Dow Jones classification, standard industry classification, industry classification of China's national economy, and industry classification of listed companies in China.
Industry analysis mainly analyzes the development stage of an industry and its position in the national economy, while making horizontal comparisons between different industries. When conducting company analysis, we use company analysis and value evaluation to study the stock market. So, how can we use industry analysis to study the stock market?
1. The growth potential of the industry
In specific analysis, the sales growth rate of a certain industry over the years can be compared with the Gross Domestic Product (GDP) and GDP growth rate, and the proportion of the industry's sales to GDP can also be calculated. Determine the growth potential of the industry through analysis and comparison.
2. Industry lifecycle
Every industry generally goes through a process from growth to decline. The lifecycle of an industry can generally be divided into three stages: infancy, growth, and decline. For example, the communication industry is currently in a growth stage, while the home appliance industry has basically entered a mature stage.
3. Market structure of the industry
The market structure of an industry is generally divided into the following types: perfectly competitive market, completely monopolistic market, oligopolistic market, and completely monopolistic market. For example, industries such as public utilities and the mining of certain rare metal mines in real life belong to the complete monopoly market type, capital intensive and technology intensive industries are basically oligopolistic monopoly market types, and some finished product markets are basically incomplete competition or monopolistic competition market types.
4. Industry prospect analysis
Based on the current economic and social environment, the future prospects of industries can also be analyzed and judged, such as non renewable resources, modern agriculture, environmental protection, and new energy industries, which have better development prospects.
