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What is the Industry Structure

What is the Industry Structure

When looking at the state of the industry, we also like to spend some time talking about the structure of the industry itself.

What is the definition of industry structure?

Specifically, what we mean by the structure, or the nature of the barriers to entry, the nature of the obstacles a new company must pass to enter that particular industry is also what is implied by the competitive dynamics in that industry:

  • What level of capital intensity is there?
  • What is the intensity level of advertising there?
  • What is the focus of companies competing with that industry?
  • What is the average company size for your competitors?

And so by digging into each of those and getting started with it you'll get a better idea of the landscape you'll be competing in.

What is the capital density?

So with capital intensity we look at money. We're looking at when you think of industries when you think of business ideas do you need a lot of money to get started? Or can you start at a very reasonable price?

SeeWhat is the Industry Lifecycle

What is the density of advertising?

The second attraction is if you are able to enter the market, as people can be easily influenced where people can be persuaded by advertising as an entrepreneur.

There are some brands that people love I will only drink the product of this company I will only wear the shoes of this company there is also a brand that people put tattoos on.

People know Pepsi, do you put a Pepsi tattoo on you? I've seen people do that you get a free Pepsi for life interesting. There is something different I am thinking of.

There are people who adore Harley Davidson bikes, they have the Harley Davidson logo tattooed on them.

Now, if a client likes you well enough to get a tattoo on it you've achieved something this way again, we want to get a sense of what role advertising plays and how easy it is to try to capture or convince you.

Now, a huge number of retail is foot traffic you happen to be near something and go for it there may be some brands that represent a destination.

I'm going to walk to or ride in a car exclusively to go to this store but this is a bit rare so you want to think about the role advertising plays and the relative costs of that.

How to focus on the company and its size?

The focus of the company you want to think about is how many competitors there are and what their typical size is. Again, we prefer to complement with smaller competitors and prefer fewer competitors but we'd rather have a lot of little things than a little big.

In this way, supplementing with a few smaller competitors is more beneficial to us It's a level playing field for you.

So what we see also sometimes is that there are emerging trends like app development.

Therefore, there are a lot of companies trying to create applications and their applications may be very successful.

They might get it in the app store, they might sell in bulk, they'd have a lot of success, they'd be a hit at home or they might build lots and lots of apps, just so none of them really took off.

See4 Entrepreneurial Behaviors

What companies are good at in their industry structure?

1. Artisan

Alternatively, there are companies like Artisan which build tools for app developers. Meaning, since there are people who build apps if I can provide platforms that help with your design this will help you to improve this user experience it is an app builder tool.

We'll take a few minutes In today's world mobile apps are part of a successful business strategy, so let me ask you something:

  • Are you getting the results you want from your app?
  • Does this increase sales, deepen engagement, or increase brand loyalty? 

It must be, that's why you need to know about Artisan the first mobile experience management platform that helps you get the results you're looking for.

Apps are all about experience and they should be as inspiring, intuitive, and engaging as the devices you're on.

Chances are if you don't get the right experience you won't get the business results you want this is why the world of apps needs craftsmen.

Because without it the ability for brands to interact with their customers and manage mobile experiences that really improve the bottom line is absolutely important.

Even making simple changes can be incredibly tedious and time-consuming from writing code to compiling and recompiling your application waiting for App Store approvals and you hope users will download your updates it takes a lot of time and resources.

2. Kickstarter

This is one of the most successful campaigns on Kickstarter, which is a crowdfunding platform the entrepreneurs started with a design and set out with the goal of raising $100,000 through presale.

So not through the investors but from the people who are going to buy the product they are going to pay them for that product and that will come with their promise to send you the product once it's created a few months from now.

So with this pre-sale item you're paying now usually at a discount if you're willing to wait a while a few months to get your product.

So they had a goal of raising $100,000 for this they made a million dollars in 28 hours and that started before May 2012 so we'll take a quick look at what they're doing.

3. The success of the Pebble watches campaign in the industry structure

I started with a prototype built from parts of a cell phone this led us to our first commercial product the inPulse smartwatch for BlackBerry.

The first question we received was when will the watch work with my iPhone? Well, we're proud to say that we can finally answer that question it is the only watch that works perfectly with iPhone and Android smartphones.

Pebble is smaller and lighter than anything else out there it has a high-definition electronic paper display which looks sharp and easy to read even outside under direct sunlight.

Pebble comes in many different colors:
  • Polar white
  • Jet black
  • Cherry red
  • Fourth color

You can vote for your color choice we are really excited about how the apps run on Pebble. If you bike, you can use the Pebble as a bike computer the GPS on your phone provides accurate data allowing you to view statistics such as your average speed time elapsed and distance traveled.

If you work with your smartphone you can use Pebble to easily control your music and monitor your pace and distance.

You can even see very important messages right on your wrist it's easy to install new apps on Pebble Just browse the Watch App Store on your phone and click install.

Pebble makes it easy to see who's calling while your hands are full, You can also control most smartphone music apps like:

  • ITunes
  • Spotify
  • Pandora
  • Google Music and more

Right from your wrist these apps are just the beginning also anyone can create apps for Pebble these applications can receive data and transmit data to the Internet.

See: Entrepreneurship, Creativity and Innovation

The Pebble has a built-in accelerometer, a vibrating motor, a powerful microprocessor, Bluetooth, and a beautiful electronic paper display.

The battery keeps the Pebble running for more than seven days. So what they did the nature of this and with these platforms like Kick Starter you can buy this for $100.

They plan to retail them for $150 in exchange for giving them money now, and again we wait from March until September so we wait about six months for that.

You get $50 off. What they also did was have two other options. However, it seems that they sold it and then may have added more later they sold 40,000 watches for $115 so they have all these different levels:

  • What kind you can buy
  • How many you can buy
  • How many colors

And if you want to buy 100 of them they will sell you 100 of them in a mix of colors who will need 100 hours? A distributor or retailer wants to put this in their store and sell it.

This way watches have been around for a long time and I'm not familiar with many watches that do what this watch does. Basically, your iPhone screen extends to your watch or wrist, so it doesn't necessarily have all the features and functionality built into the watch.

It just adds a second screen to use the software and features you already have on your phone. A very beautiful novel and very interesting as evidenced by the success they had with it.

But then again, they realized that the world might not need another watch company which works like regular watches, but there is an opportunity to do something different, and no one in the market to my knowledge does exactly that.


When we generally think of industries it comes down to two basic questions:

  • Is the industry at the right stage?
  • Is the life cycle right for you to get into as a startup?

Or if you're entering into something that might be a bit more mature:

  • So what are you going to do to be able to sustainably compete against the big companies already in the field?

The second piece is understanding the structure Understand the types of structures suitable for startups It's rare to find the perfect industry and that fits by all accounts.

But it does give you some sense of what to consider and what to watch out for. So are the things you will have to compete in and what to expect when you enter the industry.

See: How to Identify Entrepreneurial Opportunities
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