Industry Analysis
Introduction
Industry Analysis is a business market assessment tool used by businesses and
analysts to understand the dynamics of the industry. It helps them assess the current business
environment regarding the market trends, degree of competition within an industry, level of
competition of the industry against other of the same business, future prospects of the
industry with technological changes taken into account and the influence of internal and
external factors on the industry.
It is a method that helps it to understand its position relative to other participants in
the industry. It definitely helps them to identify what field they are good at and what weakens
them, as well as the opportunities and threats coming their way. It also gives the business
owners and other individuals a strong idea of the present and the future scenario of the
industry. The key to surviving in this ever-changing environment is for owners to know their
company more, understand the differences between the company and their competitors
operating in the industry and using it to its full advantage.
In this chapter, highlights the trend about the industry of employment and staffing
agency. It will also explain its target market and its competitive advantage to other players
of the same industry. Industry analysis of Jobsfinder Placement Agency Inc. will be assessed
through different methods such as Competitive Forces Model or the Porter’s Five Forces,
Broad Factors Analysis or the PESTEL Analysis and through SWOT Analysis.
Industry Trends
In 2019, the unemployment rate in the Philippines was at approximately 2.41% and
on a steady downward trend from 3.6% in 2014. This means the number of individuals being
employed increases every year. Employment agencies played a major part on this change by
providing qualified employees directly to companies needing them, as well as taking care of
their rights, security and benefits as employees working hard for their families.
This year 2020, Gen Z (those born between 1996 to 2010) would enter the workforce.
These vibrant youngsters who were raised on the internet and social media have different
expectations from the world of work. Recruitment agencies and recruiting staff in companies
must take care to meet these expectations.
Technology will be the main driver of change for employment. Automation in hiring
functions like screening candidates, scheduling interviews, scanning applications and
tracking the application process is already in practice. Employers ought to post job vacancies
through social media platforms and aspiring individuals finds jobs just one click away. There
are many websites circulating the online world that aims to be a bridge that connects
employers to people seeking for employment.
Another trend in social media space is that companies are increasingly using videos
to captivate young talent. They conduct interviews on video mode and use video promotions
to establish the employer’s brand. Video testimonials of current employees sharing
interesting aspects of their work culture and their positive experiences can inspire candidates
to join them.
Telecommuting or working from home is becoming a trend this date. This gives the
telecommuters comfort of working online at the comfort of their home. For the next years,
more people will engage into telecommuting due to the fact that law-making body pushes
online employers to provide benefits same as received of ones working on offices.
Target Market
JobsFinder Placement Agency Inc. targets companies who are in need of workforce
situated in Quezon Province and in the National Capital Region. Companies will be setting
their job position, description and qualifications and JobsFinder Placement Agency Inc. will
be handling the application, screening, completing needed requirements and monitoring.
Applicants entertained are of ages 18 and above depending when they meet the
qualifications.
Competitive Advantage
In the field of employment agencies in Quezon Province, there are numerous offices
offering these services. Some of them have their actual offices while some are using online
media platforms to advertise their services such as [Link] and Linkedin. Due to this,
JobsFinder Placement Agency Inc. finds it hard to compete on the pool of placement
agencies. It had to be competitive so one solution will be to combine the two ways of
advertising their offerings: through making a system that all applicants could search and
inquire online and through an actual office by which all applicants will be entertained
personally by staff to build trust and confidence regarding their processes.
Methods to Perform Industry Analysis
There are methods three commonly used methods of performing industry analysis.
Those three methods are:
1. Competitive Forces Model (Porter’s 5 Forces)
2. Broad Factors Analysis (PESTEL Analysis)
3. SWOT Analysis
A. Competitive Forces Model (Porter’s 5 Forces)
One famous model developed for industry analysis is Porter’s 5 Forces. It is the
analysis of five forces that gives an accurate impression of the industry.
1. Threats of New Entrants
New entrants in Staffing Agency services bring innovation, new ways of doing
things and put pressure on Jobsfinder Placement Agency Inc. through lower pricing
strategy, reducing costs, and providing new value propositions to the customers. Jobsfinder
Placement Agency Inc. has to manage all these challenges and build effective barriers to
safeguard its competitive edge. Building capacities and spending money on research and
development. New entrants are less likely to enter a dynamic industry where the established
players such as Jobsfinder Placement Agency Inc. keep defining the standards regularly. It
reduces the window of extraordinary profits for the new firms thus discourage new players
in the industry.
2. Bargaining Power of Suppliers
Most companies in the Employment Agency Services industry outsource from
numerous suppliers of applicants. Public Employment Services Office in dominant position
can decrease the margins Jobsfinder Placement Agency Inc. can earn in the market. The
overall impact of higher supplier bargaining power is that it lowers the overall profitability
of Jobsfinder Placement Agency Inc.
3. Bargaining Power of Buyers
Buyers or in this situation are the companies often demand the best applicant yet they
will be paying below minimum provincial rate. This put pressure on Jobsfinder Placement
Agency Inc. profitability in the long run. The smaller and more powerful the customer base
is of Jobsfinder Placement Agency Inc. the higher the bargaining power of the customers
and higher their ability to seek increasing discounts and offers. They can build a large base
of companies. It will reduce the bargaining power of the buyers plus it will provide an
opportunity to the firm to streamline its profit.
4. Threats of Substitute Products or Services
When a new service meets a similar customer needs in different ways, industry
profitability suffers. For example, when other company promotes an employment agency
that is way better as the services offered by Jobsfinder Placement Agency Inc., it becomes
a threat to the latter. The threat of a substitute product or service is high if it offers a value
proposition that is uniquely different from present offerings of the industry. They could
solve it through being people oriented rather than just profit oriented and by understanding
the core need of the companies.
5. Rivalry among the Existing Competitors
If the rivalry among the existing players in an industry is intense then it will drive
down prices and decrease the overall profitability of the industry. Jobsfinder Placement
Agency Inc. operates in a very competitive Employment Services industry. They can still
compete through building a sustainable differentiation and widening of target market.
Through analyzing all the five competitive forces, Jobsfinder Placement Agency
Inc. strategists can gain a complete picture of what impacts the profitability of the
organization in Employment Agency Services industry. They can identify game changing
trends early on and can swiftly respond to exploit the emerging opportunity.
B. PESTEL ANALYSIS
PESTEL ANALYSIS stands for Political, Economic, Social, Technological,
Environmental and Legal. It is a useful framework for analyzing the external environment
that affects the employment agency service directly.
1. Political Factors that Affect Jobsfinder Placement Agency Inc.
Political factors play a significant role in determining the factors that can impact
Jobsfinder Placement Agency Inc. long term profitability in the area where it was situated.
It adjusted its work regulations aligning on the rules set by Business Permit and Licensing
Office in Lucena City. Some political factors that affect Jobsfinder Placement Agency Inc.
are legal framework for contract enforcement, pricing regulations for the government
requirements needed, tax rates and tax incentives, minimum wage and overtime, work
week and time regulations in Placement Agency Services, and mandatory employee
benefits.
2. Economic Factors that affect Jobsfinder Placement Agency Inc.
Jobsfinder Placement Agency Inc. can use economic factor such as growth rate,
inflation, economic system, exchange rates, unemployment rate, education level, economic
growth and other industry’s economic indicators forecast the growth in this industry.
3. Social Factors that affect Jobsfinder Placement Agency Inc.
Social factors that Jobsfinder Placement Agency Inc. should analyze are age,
religion, gender and other demographics and skill level of population, education level and
standard, culture, attitude, entrepreneurial mindset and leisure interests.
4. Technological Factors that affect Jobsfinder Placement Agency Inc.
Technology is fast disrupting various industries across the board.
A firm should not only do technological analysis of the industry but also the speed at which
technology disrupts that industry. Slow speed will give more time while fast speed of
technological disruption may give a firm little time to cope and be profitable. Technology
analysis involves understanding the recent technological developments by Jobsfinder
Placement Agency Inc.’s competitors and the technological trends.
5. Environmental Factors that Affect Jobsfinder Placement Agency Inc.
Different markets have different norms or environmental standards which can
impact the profitability of an organization in those markets. Before entering new markets
or starting a new business in an existing market the firm should carefully evaluate the
environmental standards that are required to operate in those markets. Some of the
environmental factors that a firm should consider beforehand are weather, laws regulating
pollution, sickness and diseases, and attitude towards waste segregation.
6. Legal Factors that Affect Jobsfinder Placement Agency Inc.
A firm should carefully evaluate before entering a market as it can lead to theft of
organization’s secret sauce thus the overall competitive edge. Some of the legal factors that
Jobsfinder Placement Agency Inc. could consider are the discrimination law, intellectual
property law, consumer protection and e-commerce, employment law, and data protection.
C. SWOT Analysis
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It helps to
summarize various industry analysis method and determining their implications for
the business.
1. Strengths
Strengths are the characteristics of a business which give it advantages over its
competitors. Those characteristics of Jobsfinder Placement Agency Inc. are
with highly visible website, with limited start-up risk, can offer proper job
management. It can also provide networks, screening process and background
checks, a one stop shop for business owner’s needs, has sophisticated predictive
screening, training and seminar for applicants and with a strong networking web
within Quezon Province.
2. Weaknesses
Weaknesses are characteristics of a business which make it disadvantageous
relative to competitors. Jobsfinder Placement Agency Inc. needs to improve and
work on brand equity. There is a higher need for advertisement or promotional
campaigns and they have high costs for marketing strategies.
3. Opportunities
It is an element in a company’s external environment that allow it to formulate
and implement strategies to increase profitability. Jobsfinder Placement
Agency Inc. seen opportunities are they have high target market advantage
focusing in Quezon Province and National Capital Region, high feasibility rate
due to lesser competition, they participate in a growing industry, and they adapt
to technological changes necessary for development.
4. Threats
It is another element in the external environment that could endanger the
integrity and profitability of the business. Some threats are the possible entrance
of competitors and the attractiveness of the industry encourage new entrants
and competition as a result.
With a very detailed study of the industry, business owners can get a
stronghold on the operations of the industry and may discover untapped
opportunities. It is very subjective yet it does not guarantee success but it is
important to collect reliable data accordingly to make good decisions in your
organization.
