My product is a software development company. With the development in technology undergoing these days, programming of software is an important part of the technology. Automated machines cannot work without guiding software being programmed in it. This business will be in the IT Consulting
The NAICS code for this industry is 54151. The industry currently has 459,808 businesses. According to the 2016 industry report, the industry generated $383.1 billion in revenue translating to a profit of $24.9 billion (IBISWorld, 2016). The industry revenue grew by 5.4 percent in the year 2011. This rate reduced to 4.6 percent in the year 2012 and continued decreasing to 3.5 percent by the year 2015. The average annual growth rate from 2011-2016 is 2.3 percent.
One of the trend in the industry external environment is regulatory trends. The industry is not strictly regulated. The level of regulation is right and the trend is increasing. However, the disposal of the hardware used should be environmentally safe. Another trend is technology change. The industry uses technology to help clients. Operators in the industry are forced to update systems as computers update (IBISWorld, 2016). Another trend is capital intensity. The industry has low capital intensity. The industry is very service oriented and thus requires little capital.
Among the major competitors in the industry include International Business Machines Corp (IBM). The company has a market share of 7.9 percent in the industry with 459,808 businesses. Another major competitor is Hewlett Packard Enterprise with a market share of 4.9 percent. Another major competitor is Accenture PLC with a market share of 3.6 percent (IBISWorld, 2016). The major competitive advantage of my product over the other products is that I plan to concentrate with consulting alone. Most of the other companies sell products as well as offer services. I plan to concentrate with services alone given my low level of capital.
IBISWorld. (2016, April). IBISWorld Industry Report 54151 IT Consulting in the US. Retrieved May 14, 2016, from http://clients1.ibisworld.com.lib2.bmcc.cuny.edu:2048/reports/us/industry/default.aspx?entid=1415#
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