How Consultants Research Industries

What Getting Smart Actually Means

Before the steps, define the finish line. Conversant means holding the industry's size, growth, value chain, top five players, profit pools and two or three live controversies well enough to ask intelligent questions without notes. It does not mean expertise, which takes years, and pretending otherwise in front of clients ends badly. The target is the ability to read a partner's draft proposal and flag what an industry insider would find naive, plus the vocabulary to conduct expert interviews without wasting the expert's first ten minutes on basics. Held to that standard, the sequence below reliably delivers in a day or two of focused work.

The Friday Assignment

Management consultants must be quick learners, because junior analysts routinely support proposals and projects across wildly different industries. The good ones are fast and proficient with spreadsheets and slides. The great ones get up to speed on industry dynamics quickly enough to add specifics to the pitch, and anyone who cannot do industry research will not remain a generalist consultant for long. So what happens when a partner asks for help on a proposal about something you know nothing about, say commercial trucks? A repeatable sequence exists, and it starts broad before going deep.

Steps One and Two: Surveys, Then Filings

Start with professional industry surveys of the kind published by major ratings and analytics houses, available through many employers and universities.1 These reports arrive loaded with charts, tables and graphs covering major trends, the value chain, competitors, key financial drivers and earnings, delivering the industry's skeleton in an hour. Then move to the companies themselves. After identifying the main players through a stock screener, visit each investor relations site and download the annual report and regulatory filings, plus the presentations made to investors and analysts, a genuine treasure trove of strategy and marketing information.2 Real examples show the yield. One truck manufacturer's materials segmented its customer base into six groups, three by fleet size, two by ownership model and one vocational. Another manufacturer's quarterly earnings deck laid out its financial forecast, manufacturing strategy and market share by product type, and where the share trend worsens, the earnings webcast rewards listening, because management must answer tough questions from analysts in real time.

Steps Three and Four: Trade Groups and Screens

Industry trade organizations do an excellent job of simplifying their sector's story for non-experts, covering trends and regulatory issues in accessible language.3 Finding them takes one search trick: append the site-restriction operator for nonprofit domains to any industry keyword, and the associations surface immediately, as a trucking search returns the national carrier, manufacturer and specialty tank-truck associations within seconds. Step four turns quantitative. Compare the financials of the industry's companies to see the 80/20 breakdown of revenue and profit, using free screening tools that rank players by market capitalization, revenue, earnings, margins, dividends and returns on assets and equity. An hour with the comparison table reveals who actually makes the industry's money, which is rarely who makes its headlines.

Steps Five and Six: Forums and Profiles

Qualitative texture lives where practitioners talk. Spend 15 or 20 minutes on industry blogs and forums, found by adding those words to targeted searches, and learn the basics from the online community rather than asking a client a question that broadcasts ignorance of their industry. Professional networking profiles supply the sixth source, since current and former employees describe projects and responsibilities in surprising detail, and entire market sizings have been assembled from tidbits that marketing managers left on their public profiles. Both sources cost nothing and inoculate against the beginner errors that expensive sources never mention.

Step Seven: Prepare for Primary Research

Online research has a ceiling, and the final step breaks through it. Think through your questions first, then reach out through professional contacts and undergraduate or graduate alumni networks, because a thirty-minute conversation with a subject-matter expert is sometimes worth three days of online research. Productive interview targets span the value chain: suppliers and customers above and below the target companies, distributors and dealership owners, former employees and industry researchers or professors. The prepared questions matter, since experts give their best answers to people who have plainly done the homework steps one through six.

Time-Boxing the Ladder

The sequence works best under explicit time budgets, because industry research expands to fill any allowance. A proposal-support brief fits in one day: two hours on surveys, three on filings and investor decks, one on trade groups, one on financial screens and the remainder on forums and profiles, with interviews reserved for the engagement itself. A project kickoff justifies a week, adding expert calls and deeper filing analysis. The discipline within any budget is note-making in one running document with sources attached, since research that cannot be handed to a teammate was never finished. Close each session by writing the three questions you still cannot answer, because those questions direct the next session and become interview material later. Speed comes from the sequence; quality comes from the unanswered-questions list.

Steps Eight Through One Hundred

The list never truly ends, and the remaining avenues include trade magazines, conferences, government and industry datasets, product reviews, surveys and focus groups. Veteran consultants cheerfully admit to buying beginner-level guidebooks on obscure industries, and new analysts will too. Readers inevitably contribute more sources for any given sector, from logistics strategy guides to industry societies, which is itself the final lesson: research skill compounds through community. Start with the seven steps, ship the proposal support on time and let each industry studied make the next one faster.

• 1S&P Global
• 2U.S. Securities and Exchange Commission
• 3Trade association