Markets and Industries

An industry is completely different from a market. This incredibly simple contrast causes nothing but problems for many naïve managers.

An industry is made up of a group of competing sellers. A market is made up of a group of competing buyers. It is very likely that the industry is attractive where the market is not and visa versa.

The promise of the industry may well be eroded by the challenges of the market. Similarly, the opportunities of the market may well be dampened by the destructive competition of the industry.

In assessing any opportunity it would be prudent to thoroughly assess both sides of the market-industry equation.

Some guru's say "don't sell what you can make, make what you can sell!" I find this notion too simplistic. Although I can't come up with a grabby cliché myself, I will say that if you can make it competitively and sell it competitively then you may have a winner.

The lesson in short is that not one business can ignore the effects of either the market or the industry. The two are so fundamentally different yet equally critical that any competitive decision must give them reasonable weight.