K120-ind-ny - Industry Product Knowledge

Key External Drivers are assigned their weighted figures based on their influence on the industry. The greater the influence of a Key External Driver on the industry, the higher weight it receives. This means that the more significant factors that have a major impact on the industry are given more importance in determining the weighted figures.

The section of an Industry Report that can answer the client's questions about a particular industry is "Barriers to Entry". This section provides information on the factors that prevent new companies from entering the industry, which directly addresses the first question. It also gives insights into how difficult it will be to establish a business, as the barriers to entry indicate the level of competition and the challenges faced by new entrants. Therefore, the "Barriers to Entry" section is the most relevant in addressing the client's concerns.

The "Industry Outlook" section of our Industry Reports provides a discussion of anticipated key trends within the industry over a period of 5 years into the future. This section aims to provide readers with insights into the expected changes and developments that may impact the industry within this timeframe. By focusing on a 5-year horizon, it allows businesses and individuals to make informed decisions and strategies based on the projected trends and potential opportunities or challenges that lie ahead.

Auditors can utilize the Key External Drivers to identify risks that are beyond the control of business managers. By doing so, auditors can inquire about the strategies and measures that the clients have in place to mitigate these risks. This allows auditors to assess the effectiveness of risk management practices and provide recommendations for improvement if necessary. Therefore, the statement is true.

The classic definition of a major player in an industry is a business that operates primarily in that industry and generates over 5% of the industry revenue. This means that a major player is not just any business in the industry, but one that has a significant impact and influence due to its size and revenue generation. Therefore, the statement "True" accurately reflects this definition.

False. When a company grows faster than an industry, its market share actually increases. This is because the company is outperforming its competitors and capturing a larger portion of the market. As the company expands and gains more customers, its market share naturally grows.

A higher level of industry risk is indicated by a high level of revenue volatility. This means that the industry experiences significant fluctuations in its revenue, which can be attributed to various factors such as changes in market demand, competition, or economic conditions. High revenue volatility implies a greater level of uncertainty and potential financial instability for companies operating in the industry, making it riskier compared to industries with lower revenue volatility.

The client can read the "Products and Services" section of our Industry Reports to understand the size of each product/service within the industry. This section provides information about the different products and services offered by companies in the industry, their market share, and their contribution to the overall industry revenue. It helps the client to gain insights into the specific products/services that are driving the industry's growth and profitability.

In the Key Statistics section of our Industry Reports, we provide five years of forecast data, excluding the current year. This means that users can access projections and predictions for the industry's performance for the next five years. This information can be valuable for businesses and individuals to make informed decisions and plan for the future.

False. The higher the level of globalization and trade in an industry, the more power multinational corporations tend to have, rather than individual local firms. This is because multinational corporations have greater resources, global networks, and economies of scale, which allow them to dominate the market and exert more influence. Local firms, on the other hand, may struggle to compete and maintain their market share in the face of intense global competition.

The "Current Performance" section of our reports is not geared towards specific client groups, but rather provides information that is relevant and of interest to a wide range of prospects. Therefore, the statement that it tends to be geared more towards specific client groups and may not be of interest to a wide range of prospects is false.

Industries with low capital intensity rely more on labor because they require less investment in machinery, equipment, and technology. Instead, they prioritize human labor to carry out tasks and operations. This can be seen in industries such as agriculture, hospitality, and retail, where manual labor is crucial for production and service delivery. In contrast, industries with high capital intensity heavily rely on capital investments to automate processes and reduce the need for human labor.

Industries with a high level of capital intensity, not a low level, are more likely to seek bank capital and upfront investment capital to begin production. This is because capital-intensive industries require significant upfront investment in machinery, equipment, and infrastructure. They rely on external funding sources such as banks to finance these capital expenditures. Therefore, the given statement is false.

The correct answer is "The Supply Chain." In the "About This Industry" chapter, the section on the supply chain provides a visual representation of the buying and selling linkages, a list of industries producing similar products, and the key economic drivers of the industry. This section helps to understand the flow of goods and services within the industry, identify related industries, and analyze the factors that influence the industry's performance.

The statement is true because when there is a high level of competition in an industry, existing firms have already established their market presence and have likely built strong customer relationships, brand recognition, and economies of scale. This makes it difficult for new firms to enter and compete effectively. Existing firms may also have the advantage of established distribution channels and access to resources, making it harder for new entrants to gain market share. Therefore, the greater the level of competition, the more challenging it becomes for new firms to enter the industry.

Volatility refers to the year-on-year fluctuations in an industry's revenue, meaning that it measures the amount of variation or instability in the revenue of an industry from one year to the next. It does not take into account the total change in revenue over a given period of time, only the fluctuations within each year. Therefore, the statement is true.

In the "Industry at a Glance" chapter of an IBISWorld Industry Report, a client can view an executive summary and see a visual representation of selected key statistics that are discussed in greater detail throughout the report. This chapter provides a concise overview of the industry, highlighting important data and trends in a visually appealing format. It serves as a quick reference point for clients to get a snapshot of the industry's performance and key insights before delving into the detailed analysis provided in the rest of the report.

In the "Cost Structure Benchmarks" section of the reports, profit is calculated using EBIT (Earnings Before Interest and Taxes), which means that taxes and interest are excluded from the analysis. Therefore, the statement "profit is calculated using EBIT, in which taxes and interest are excluded from the analysis" is true.

The International Trade section of IBISWorld's Industry Reports helps clients identify countries that have a comparative advantage in producing a good or service and analyzes how this impacts the domestic market. This implies that the statement is true.

In the Key Statistics section of our Industry Reports, we provide data for a total of 10 historical years, including the current year. This allows users to analyze and compare industry trends and performance over a significant period of time. Providing data for 10 years ensures that users have access to a substantial amount of historical information to make informed decisions and gain insights into the industry's past performance.

The "Industry Outlook" section typically provides information on how the industry is expected to perform over the next 5 years, the key trends that will affect performance and why, and the opportunities or threats that will affect operators. These are all questions that a client might have in order to understand the future prospects and potential risks in the industry.

The client can look in the "Major Markets" section of the report to answer the questions they might have. This section would provide information on who buys the industry's products and how these markets have changed over the past five years. It would also provide insights on how these changes have affected industry performance.

The Competitive Landscape chapter in Industry Reports examines the external factors that impact the industry's operations. This section provides an analysis of the industry's competition, market trends, and other external forces that can influence the industry's performance. By understanding the competitive landscape, businesses can make informed decisions and develop effective strategies to thrive in the industry. Therefore, the statement is true.

The "Major Companies" chapter of the report can answer the following questions: Which companies have the most substantial influence on this industry? This chapter provides information on the top companies in the industry and their impact. How have the operations of leading players in the industry fared in the past few years? This chapter includes data and analysis on the performance of the industry's key players over a specific period. Which strategies allow the top companies in the industry to be more successful? The chapter may provide insights into the strategies employed by successful companies in the industry.

Entry costs, skills shortage, intellectual property, and strict regulations are all examples of typical barriers to entry. Entry costs refer to the financial investment required to enter a market, which can deter new entrants. Skills shortage means that there is a lack of qualified individuals with the necessary expertise to compete in a specific industry. Intellectual property refers to legally protected creations or inventions, which can prevent others from entering the market. Strict regulations can create barriers by imposing costly compliance requirements or limiting market access. These barriers can make it difficult for new competitors to enter the market and compete effectively.

False. An industry is considered to have a high level of industry globalization when the level of foreign ownership is greater than 35%.

Exchange rates and government policies are examples of key external drivers because they are external factors that can significantly impact a business's operations and performance. Exchange rates determine the value of currency in relation to other currencies, which can affect a company's international trade, import/export costs, and profitability. Government policies, such as tax regulations, trade policies, and labor laws, can also have a significant impact on a company's operations, costs, and overall business environment. Rent and utilities costs and wages, on the other hand, are internal factors that are influenced by the business itself and not external drivers.

The "Cost Structure Benchmark" section of our Industry Reports includes a chart that benchmarks the average industry costs against the average industry costs for all industries. However, the correct answer is False.

BDMs can direct a prospect to the "Basis of Competition" section of a report if their client wishes to gain insight into which factors give companies a competitive advantage in the industry and what strategies they can pursue to increase their sales. This section would provide information on the fundamental aspects of competition within the industry, including the key factors that differentiate successful companies from their competitors and the strategies they employ to stay ahead in the market.