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External Analysis Research

A guide to identifying secondary sources for conducting an analysis of the external environment as part of the strategic planning process.

Analyzing the Operating / Industry Environment

One method used to analyse trends in the operating or industry environment is Michael Porter's Five Forces Industry Analysis, which examines the interaction of the following factors:

- The threat of new entrants

- The bargaining power of suppliers

- The bargaining power of buyers >

- The threat of substitute products or services

- The degree of rivalry among existing competitors

For-profit Organizations

  • The operating environment of for-profit organizations includes customers, suppliers, and competitors. 
  • Other factors to consider may be interest groups such as trade unions (for unionized companies), consumer watchdog or advocacy groups, municipal, provincial, or federal government bodies,  and other regulatory agencies.

Non-profit or Charitable Organizations

  • The operating environment of non-profit or charitable organizations may also include other external stakeholders including funding agencies or donors.

Defining Your Industry

Bensoussan and Fleisher (2012) recommend the following process.

  • Specifically identify or define your industry. You may wish to consult a standard industry classification systems such as NAICS, but there are other ways to identify the boundaries of an industry (based on products, customers, and competitors).
  • Once you have defined the industry, begin to gather information in order to evaluate each of the five forces.

Sources consulted:

  • Bensoussan, B. & Fleisher, C. (2012) Analysis without paralysis, 2nd ed.
  • Bryson, J.M. (2011) Strategic planning for public and nonprofit organizations, 4th ed.

For help with NAICS, please see: http://researchguides.library.brocku.ca/company-industry/naics

Secondary sources for industry and nonprofit sector research

Company Directories

You can identify for-profit and non-profit organizations using a variety of directories, Library databases, and web sites. You can often identify competitors within the same industry by searching by NAICS code or by keywords in the NAICS description. Read the descriptions under each resource to determine if it will work for your particular data gathering task, based on the purpose of the directory, the geographic scope, and the types and sizes of organizations covered within it.

The following examples illustrate the wide variety of directories in existence:

Industry and Trade Associations

  • Industry and trade associations can be excellent sources of research, statistics, and current information on industries. These associations often publish this information on their own websites. Use your favorite search engine to locate relevant associations in Ontario, Canada, or elsewhere.
  • Industry profiles (from IBISWorld, First Research, and other providers) routinely list such associations in the Additional Resources section of each report.

Industry Profiles

You can learn more about industries and the competitive landscape by consulting one or more of the following sources of industry profiles. Additional sources of Industry Profiles, including Ontario-specific profiles, may be found on the Companies and Industries Research Guide.

Trade Journals

Trade journals (also known as trade magazines) are business-to-business (B2B) magazines which focus on specific industries, business types, or professions. They may be published by trade associations, professional organizations, or commercial publishers on a weekly or monthly basis. The content of a typcial trade journal includes industry news, product updates, industry forecasts, interviews with key companies and business leaders, and specialized directories.  

You can identify relevant trade journals using the following websites:

Some trade journals may restrict access to their online content to subscribers. Most business researchers will rely on the access provided by Library databases. Examples of these are listed below:

Newspapers

  • This category includes daily newspapers (local, regional, or national in focus), news magazines, and general business news sources.
  • Local newspapers typically report on events in the local area, and focus on locally-based organizations and niche industries (e.g. the Niagara wine industry, or tourism in Niagara Falls).
  • Many newspapers have pay walls on their websites, which limits the number of "free" articles which nonsubscribers may access. Most libraries provide access to news content via their licensed resources (typically news databases).
  • Some key sources appear below:

Not for Profit / Charitable Sector

The following sources focus on the Canadian non-profit and/or charitable sector and include sector profiles, statistical data, and specialized directories.

Scholarly Journals Focused on the Nonprofit Sector