Analyzing Industries and Companies: Analyzing an Industry

Step 1. Identify the industry you want to research. 

Example, Restaurants.

Step 2. Identify the NAICS code for that industry...

NAICS is the standard used by Federal statistical agencies in classifying businesses.  It stands for North American Industry Classification System.  There are a few ways to find it...

2a. On the NAICS Association website.

1. You can do a keyword search to find the NAICS code that fits your industry, or

2. You can use the "drill down" option to reach the code for your industry.  The drill down option allows you to start with a general industry and narrow it down until you get to the code that most closely matches your industry.

Example, doing a keyword search for restaurants brings up three results: Meat Markets, Full-Service Restaurants, and Limited-Service Restaurants.  I want Full-Service Restaurants, so I note the NAICS code for that result: 722511.

2b. Through other databases, such as Mergent Online, ReferenceUSA, or Business Source Complete.

If you know of a famous company in your industry, you can use that company to find the appropriate NAICS code.  Searching for a particular company in Mergent Online or ReferenceUSA will lead you to the NAICS code.  Searching for a SWOT analysis for the company in Business Source Complete will also lead you to the NAICS code in the article's record. 

Example, searching for Cracker Barrel in Mergent Online shows that the NAICS code listed is 722110.  Wait, what?  The code we found through the NAICS Association website says it's 722511, so who's telling the truth?  Both.  If you Google the two NAICS codes, you'll find that this is one of the codes that changed in 2012.  The list of those codes is linked to below.

Step 3. Use Business Source Complete...

Business Source Complete is a database that offers reports, articles, and SWOT analyses. 

3a. To search for reports on your industry. 

To search for reports in your industry, enter the NAICS Title and click Search.  Use the Source Type section on the left to limit results to Market Research Reports.

Example, search Full-Service Restaurants.  Limit results to Market Research Reports.

3b. To search for articles about your industry. 

To find articles about your industry, enter the NAICS Title and click Search.  Use the Source Type section on the left to limit results to Academic Journals.  (Trade Publications are also another limiter you can use.)

Example, search Full-Service Restaurants.  Limit results to Academic Journals.

3c. To find SWOT Analyses in your industry. 

A SWOT analysis is a study undertaken by an organization to identify its internal strengths and weaknesses, as well as its external opportunities and threats.  In fact, that’s how it gets the name SWOT (Strengths, Weaknesses, Opportunities, Threats).  To search for SWOT analyses in your industry, enter the NAICS code in the first search box and select IC NAICS Code or Description.  Then enter SWOT in the second search box.  Click Search.

Example, search 722511 and SWOT.

Step 4. Use your NAICS code to search Industry Statistics Portal.

Industry Statistics Portal is a database that shows you where you can find information on different industries from the U.S. Census Bureau.  This site directs you to all sorts of free government data, such as Statistics of U.S. Businesses, Business Expenses, and County Business Patterns.  You can search by NAICS code to find the sources that have information on your industry, or you can browse the NAICS code options on the left side of the screen.

Example, to browse sources that might have info on the Full-Service Restaurants industry, I can use the NAICS code 722511.  I can search for that code, or I can click on 72—Accomodation and food services, then 722-Food services and drinking places, then 7225-Restaurants and other eating places, then 72251-Restaurants and other eating places, and finally 722511-Full-service restaurants.

Step 5. Find Industry Surveys in Standard & Poor’s NetAdvantage.

S&P's NetAdvantage can be a great place for company information, but many don't realize that you can find industry surveys by topic.  To the left, there is a S&P Publication Search section, where you will find a dropdown menu of topics for Industry Surveys.  Find the topic that best describes your industry.  From there, you'll be able to find industry trends, key ratios and statistics, and even how to analyze the companies in that industry.

Example, I chose Restaurants from the dropdown menu.  I noticed that the result was a survey from August 2014.  So I looked at the other topics and found Hotels, Restaurants & Leisure.  That survey is from July 2015, so I can use that.

Step 6. Use your NAICS code to search for companies in Mergent Online.

Mergent Online has detailed information about the companies in your industry, including financial information, company reports and filings, and executives.  This is also a great place to build your own reports of different companies for comparison. 

Example, enter 722511 in the search box in the Classification Search section to the right.  Select Primary NAICS and click Search.  There are no results.  That can't be right!  We know from earlier that there are times when the NAICS code in other areas doesn't match the NAICS code in Mergent Online.  So what do you do when this happens?  So next, you could search for a company that you know is in the industry you are researching.  In this case, Cracker Barrel.  When we see the page for Cracker Barrel, we see that the code is listed as 722110.  We can then search for that NAICS code.  Another option is to click the Use Code Lookup link to drill down to the code Mergent Online uses.

Step 7. Search for local businesses by NAICS code with ReferenceUSA.

ReferenceUSA can be a great place to find information on private companies.  You can search by company name or executive name from the main page.  To search by NAICS code (or other criteria), click on the Custom Search tab, then select the criteria from the column on the left.  In our case, we'll select Business Type and then select Keyword/SIC/NAICS.  To limit the results to a particular area, click on Geography and select the scope you want to search (state, city, zip code, etc.).

Example, searching for the NAICS code 722511 turns up over 15 million results.  This is not surprising.  I can now limit my search results to the UNO area by clicking on Geography and selecting zip codes. After entering 70122, I have 33 results. 

Business resources - especially databases - often use NAICS or SIC codes to categorize information on a given industry. NAICS (North American Industry Classification System) codes replaced SIC (Standard Industrial Classification) codes in 1997, but both may still be in use. Find NAICS and SIC codes with: