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Essay text:
One can focus on the industry environment for example, especially on customers, suppliers and competitors.
An industries profit comes from how perfect the market is. In general the price a customer wants to pay needs to exceed the cost the company incurrs. With growing competition that gap will close and in a perfect market, there will be perfect competition and hence virtually zero margin. The other extreem would be a monopoly with most markets sitting in between, being oligopolies.
Porter's five forces framework is one way to look at industry stucture. It looks at the bargaining power of suppliers, threat of substitutes, bargaining power of buyers, threat of new entrants and industry competitors...
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