Industry Analysis Essay Example | Topics and Well Written Essays - 750 words - 4

Industry Analysis - Essay ExampleThe fundamental ruleof the industry is based on sharing the risk than the transfer of the same (Hassan & Lewis,2007). The banks in the industry act as the financial intermediator that is investment banking hence transacting mortgages. In mortgage transactions, the banks purchase the items from the sellers and re-sell them in the market at a attain instead of lending the money to the buyer to make purchases.It is a fallacy to purport that when an industry discharges nicely in one period continues at the same pace in future. It is uncertain because the business field very competitive. Each industry tries to gain a competitive position by producing high-quality products and services and adapt them to their customers (Agawam, 2010). This is done courtesy of customer loyalty. Additionally, industries strive to effectively and sufficiently utilize the resources available to generate gross and consequently profits. For an industry to have a stay in the industry, it must be in a position to generate high profits to cater for the payment of shareholders through dividends and payment of other stakeholders wish well employees, the government, suppliers and creditors.The business environment is dynamic and the following are the factors that can cause the industry not to perform well in future. Firstly, it can be observed by financial analysts that the cost of providing the products and services digress from one fiscal year to another. Holding other items of the income statement constant, an increase in such costs will lead to a decline the profits of the industry. The industry can, therefore, be forced to borrow finances externally to finance its business, and this increases the financial risk to the industry.The industry has got a vast geographical area of cognitive operation and this call for theforeign trade of currency for its transactions. Unfavorable movement in the exchange rates (increase in exchange rates) will adversely a ffect the operations