FOR industry analysis is COSTCO WHOLESALES CORP THAT ITS STOCK IS IN DISCOUNT AND VARIETY StORES INDUSTRY.

Industry analysis needs to be performed within the context of an economic forecast. So that everyone uses the same economic forecast, use the forecast provided in S&P Netadvantage under "Industry Surveys: Trends and Projections".

Industry Analysis

Industry analysis is intended to understand the structure of the key industry(s) in which the company competes and how each industry is affected by the domestic and global macroeconomies.

Identify in each industry your company's market share and major competitors with their approximate market shares. What are the characteristics of each industry? What are the key economic drivers for the industry? What are the primary risks facing the industry?

Is the industry capital intensive or, put another way, with what degree of operating leverage do the companies' operate (i.e., percentage change in operating profits for a given percentage change in sales)? What is the current and forecasted industry demand?

How sensitive is industry demand to the business cycle? How mature is this industry (i.e., start-up, consolidating, mature, or decline)?

What threats does the industry face (e.g., consolidation, global competition, technological, protection of intellectual property)?

What are the overriding trends in the industry? How is the industry regulated and what impact does regulation have on industry operations?