Before making an investment decision, investors need to conduct a comprehensive, in-depth and systematic investigation and evaluation of the target enterprise or project, a process called investment due diligence (Due Diligence). Investment due diligence can help investors understand the real situation of the target, identify potential risks and problems, determine reasonable valuation and trading conditions, and avoid legal disputes and reputation losses. Investment due diligence involves many aspects, including finance, law, business, technology, etc. Among them, commercial due diligence refers to the analysis and evaluation of the market, customers, competitors, suppliers, channels, products, services and other aspects of the target enterprise or project.

An important part of business due diligence is industry analysis (Industry Analysis). Industry analysis refers to the study and judgment of the industry environment in which the target is located, including the size, structure, growth rate, trends, drivers, competitive landscape, profit level, risk factors, etc. Industry analysis can help investors understand the opportunities and threats facing the target, evaluate the competitiveness and growth of the target in the industry, and formulate reasonable investment strategies and expected returns.

So, how to conduct effective industry analysis? Generally speaking, industry analysis can follow the following steps:

Determine the scope and objectives of the analysis. First, it needs to be clear what the industry to be analyzed is and what the purpose of the analysis is. For example, if you are investing in an e-commerce platform, the industry to be analyzed may be the e-commerce industry or a more segmented market segment; if you are investing in a medical device company, the industry to be analyzed may be the medical device industry or a more segmented product category. At the same time, it is necessary to clarify what the goal of the analysis is, for example, to understand the overall situation of the industry, or to compare the advantages and disadvantages of the goal and competitors, or to predict the future development of the industry.

Collect and organize data and information. Secondly, it is necessary to collect and organize relevant data and information, including macroeconomic data, industry reports, market research, expert interviews, policies and regulations, industry associations, media reports, etc. These data and information can be obtained from multiple sources, such as public databases, websites, publications, institutions, etc., or through their own surveys and research. The purpose of collecting and organizing data and information is to build a complete, accurate, objective and valuable industry analysis framework and model.

Analyze and evaluate data and information. Next, the data and information collected and collated need to be analyzed and evaluated, using some commonly used analytical methods and tools, such as the Porter Five Forces Model (Porter’s Five Forces Model), Boston Matrix (BCG Matrix）、SWOTAnalysis (Strengths, Weaknesses, Opportunities, Threats Analysis), etc. The purpose of analyzing and evaluating data and information is to identify opportunities and threats in the industry, assess the competitiveness and growth of the target in the industry, and formulate reasonable investment strategies and expected returns.

Write and present reports and recommendations. Finally, the results of the analysis and assessment need to be written into a clear, concise and persuasive report, with some specific recommendations and observations based on the objectives of the analysis. The report should include the following sections: background, analytical methods, findings, conclusions and recommendations. The report should present data and information in the form of charts, tables, etc., so that it is easy to read and understand. The report should use professional language and terminology to reflect the level of experts. The report should be presented to relevant decision makers or stakeholders, such as investors, management, partners, etc., and revised or supplemented based on their feedback.

These are the basic methods and steps of industry analysis. However, industry analysis is not an easy task, and it requires a significant investment of time, effort, resources and expertise. Without sufficient experience and ability, the analysis results may be inaccurate, imperfect or unreliable, thus affecting the quality of investment decisions. Therefore, when conducting industry analysis, it is sometimes necessary to rely on external professional service organizations to provide assistance.

Champ Consulting (Shangpu Consulting) is a consulting firm specializing in commercial due diligence services, with many years of industry analysis experience and capabilities. Shangpu Consulting can provide investors with high-quality industry analysis reports and recommendations to help investors make better investment decisions. Champ Consulting has the following advantages:

Shangpu Consulting Company has a professional team composed of senior industry experts, market researchers, data analysts, etc., which can conduct in-depth research and judgment on various industries.

Champ Consulting has a wealth of data resources and information channels to obtain the latest, most comprehensive and most reliable industry data and information.

Champ Consulting has advanced analytical methods and tools that can use multiple dimensions and perspectives to analyze and assess industry opportunities and threats, assess the competitiveness and growth of targets in the industry, and develop sound investment strategies and expected returns.

Shangpu Consulting has a wealth of industry cases and experience, and can provide investors with some specific industry analysis reports and recommendations, as well as some successful investment cases and stories.

In order to demonstrate the effectiveness of our industry analysis services, the following is a brief description of some of the industry analysis reports and recommendations provided by our clients:

Provided an analysis report and recommendations on China's new energy vehicle industry for a European private equity fund, helping it to invest in a leading new energy vehicle manufacturer. The report analyzes the scale, growth rate, trends, driving factors, competitive landscape, profit level, risk factors, etc. of China's new energy vehicle industry, as well as the market share, product line, technical advantages, financial status, and development strategy of the target company. The report presents the opportunities and threats that investors should focus on, as well as investment strategies and expected returns. Information on some other potential investment targets and partners is also provided in the report.

Provided an analysis report and recommendations on China's online education industry for a US venture capital firm, helping it to invest in an innovative online education platform. The report analyzes the scale, structure, growth rate, trends, drivers, competitive landscape, profit level, risk factors, etc. of China's online education industry, as well as the user scale, product characteristics, teaching quality, operational efficiency, and profit model of the target company. The report presents the opportunities and threats that investors should focus on, as well as investment strategies and expected returns. Information on some other potential investment targets and partners is also provided in the report.

Provided a Japanese multinational company with an analysis report and recommendations on China's medical device industry, helping it to invest in a professional medical device manufacturer. The report analyzes the scale, structure, growth rate, trends, driving factors, competitive landscape, profit level, risk factors, etc. of China's medical device industry, as well as the product types, technical level, market share, financial status and development prospects of the target enterprises. The report presents the opportunities and threats that investors should focus on, as well as investment strategies and expected returns. Information on some other potential investment targets and partners is also provided in the report.