Final answer:
An industry analysis offers insights into market structures and competitive intensity, aiding business managers in selecting profitable and viable product ideas among various options based on market conditions
Step-by-step explanation:
An industry analysis is a comprehensive assessment of the economic dynamics within a market sector. It provides vital information about how many sellers are in a market, the barriers to entry for new firms, and the distinctiveness of products sold by these firms. This analysis is crucial in understanding an industry's market structure, which includes different formations such as perfect competition, monopoly, monopolistic competition, and oligopoly..
For business managers, conducting an industry analysis enables them to make informed decisions on product selection. By comparing the market structure and competitive intensity, they can identify the most viable product ideas from a pool of candidates. This evaluation helps to forecast potential profits, gauge market saturation, and understand the risks associated with entering or staying in the business.