Industry and Competitive Analysis

Free CFA Level I lesson in Equity Investments. 13 min read, ~1,995 words.

Top-down process: define industry, classify peers, size the market, map structure, assess external forces, then value the company. Three classification axes: products/services (GICS, ICB, TRBC), business cycle sensitivity (cyclical vs. defensive), statistical clustering. Industry life cycle: embryonic, growth, shakeout, mature, decline. Each stage has its own growth and profitability profile...

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