Industry Primer

Use This Skill When

• The user needs a decision-useful industry overview before company-level work.
• The task is to understand value chain structure, profit pools, bargaining power, and regime drivers.
• The analysis must separate structural features from cyclical conditions.
• The user wants to know what actually matters for investors in this industry.

Required Inputs

• industry definition and geographic scope
• industry participants: manufacturers, distributors, platforms, service providers, regulators, or intermediaries
• end customers and demand drivers
• value chain or supply chain structure
• market structure: fragmentation, concentration, capacity, pricing, regulation
• financial context if available: margin pools, returns, capital intensity, growth
• recent regime factors: technology shifts, regulation, commodity inputs, cycle stage
• If the boundary is unclear, define the chosen scope explicitly, note excluded adjacencies, and avoid pretending the industry is more comparable than it is.

Workflow

1. Define the industry boundary, geography, and what adjacent markets are excluded.
2. Map the value chain from input supplier to end customer.
3. Identify the major participant types and how they make money.
4. Explain where profits pool and why they accrue there:
   • scale
   • switching costs
   • regulation
   • bottlenecks
   • customer captivity
5. Separate structural drivers from cyclical drivers:
   • demand drivers
   • capacity dynamics
   • pricing mechanisms
   • regulation
   • technology shifts
6. Summarize current competitive dynamics and likely regime changes over the next 1 to 3 years.
7. Conclude with investor-relevant takeaways, including what would matter most for security selection.

Output Requirements

• Define the industry boundary before discussing market structure.
• Show the value chain and explain how profits move through it.
• Use Fact, Assumption, and Inference labels whenever causality is uncertain.
• Distinguish structural economics from temporary cycle conditions.
• Highlight which subsegments are attractive and which are structurally weak.
• End with implications for company analysis, not just descriptive sector commentary.

Output Template

Quality Checks

• Verify the boundary definition is explicit and consistent throughout.
• Check that profit-pool conclusions match the described value chain.
• Confirm that cyclical commentary is not mislabeled as structural advantage or weakness.
• Ensure key players are grouped by business model rather than by a random peer list.
• Remove generic framework filler that does not change the investment conclusion.

Guardrails

• Do not blur adjacent markets into the same industry without justification.
• Separate facts, assumptions, and inferences explicitly.
• Do not invent market share, margin pools, or capacity data.
• Avoid generic "winner takes all" or "fragmented market" language unless supported by evidence.
• If the industry is too broad, narrow scope rather than writing vague conclusions.

Example Prompts

• Build an industry primer for this sector, including profit pools and key structural drivers.
• Explain the competitive structure of this industry and what matters most for investors.
• Write an investor-focused industry primer that separates structural economics from current-cycle noise.