Market Trends in Industry Analysis: The Case for Blending Five Forces and PESTLE

Here’s a number that should stop you cold: the global insights industry topped US$140 billion in 2023 and was on track to blow past US$150 billion by the end of 2024 (ESOMAR via Research World). That’s not just a big number; it’s a signal that industry analysis has become a growth industry in its own right. But too many analysts are still treating frameworks like Porter’s Five Forces and PESTLE as either/or choices. That’s a mistake. The CFA Institute explicitly recommends using Porter’s Five Forces to interpret the competitive environment and PESTLE to understand external trends. I’m going to argue that you need both, and I’ll walk you through a concrete scenario to show why.

The Scenario: You’re a Market Analyst at a Mid-Sized Consumer Goods Firm

Imagine you’re a market analyst at a mid-sized consumer goods company that makes premium snack foods. Your CEO wants to know whether to expand into Asia Pacific, a region that’s been growing fast. The first thing you’ll do is define the industry. According to the CFA Institute, analysts define the industry, survey total sales and growth, and distinguish the total market from the strategically relevant market (SRM). For your company, the SRM might be premium snacks in urban centers of Southeast Asia, not the entire food sector.

Step 1: Run PESTLE to Scan the Macro Environment

Before you even look at competitors, you need to understand the macro forces. PESTLE covers Political, Economic, Social, Technological, Legal, and Environmental factors (CFA Institute). Politically, you’d check trade policies and tax regimes—for instance, are there tariffs on imported snacks? Economically, you’d look at growth rates and disposable income. In Asia Pacific, the insights industry grew about 9.5% in 2023, well above the global 8.0% (ESOMAR via Research World). That kind of growth suggests a dynamic economy, but you need to dig deeper. Socially, are consumers shifting toward healthier snacks? Environmentally, is there pressure for sustainable packaging? These aren’t just nice-to-haves; they can make or break your entry.

Step 2: Then Use Porter’s Five Forces to Gauge Competitive Rivalry

Once you’ve scanned the macro environment, you need to assess how competitive the market actually is. Porter’s Five Forces—threat of new entrants, substitutes, supplier power, buyer power, and competitive rivalry—determine how the economic value an industry creates is apportioned (Harvard Business School). In your premium snack market, you might find that buyer power is high because consumers have many choices, or that the threat of substitutes is high because there are cheaper local snacks. The stronger these forces, the lower the industry’s profit potential (CFA Institute). If you only did PESTLE, you’d miss the fact that even in a fast-growing market, intense rivalry can crush margins.

Step 3: Combine Both to Identify the Real Opportunity

Here’s where the magic happens. PESTLE tells you that Asia Pacific is growing fast, but Porter tells you that the premium snack segment is crowded. So what do you do? You look for a niche where the five forces are weaker. Maybe you spot an underserved segment: healthy, sustainable snacks. The environmental factor from PESTLE (increasing scarcity of raw materials, pollution targets, carbon footprint goals) suggests that sustainability is becoming a key differentiator (Washington State University Libraries). Porter’s framework then helps you assess whether your company can build a defensible position. You might decide to enter Vietnam, which grew 17.2% in absolute terms in 2023 (ESOMAR via Research World). But you’d also check the competitive landscape using HHI, the Herfindahl-Hirschman Index. If the market is highly concentrated (HHI above 1,800 under US 2023 Merger Guidelines), you might face a dominant player (US DOJ Antitrust Division).

Step 4: Quantify Market Growth with CAGR and Market Size

Numbers matter. The global market research industry was valued at about $76.37 billion in 2021 and was projected to reach over $108 billion by 2026 (Similarweb / Research and Markets). That’s a CAGR you can calculate, but more importantly, the US holds the largest share at about 53% (Similarweb / Research and Markets). That tells you where the demand is concentrated. For your snack company, you’d look at the specific segment’s growth rate. If you’re entering a market with a high CAGR, that’s attractive, but you also need to consider the base. A 17% growth rate in Vietnam is impressive, but the absolute size might be small. You’d use the SRM concept to define your addressable market.

Step 5: Don’t Forget the Industry Life Cycle and Growth Strategies

Industry analysis isn’t just about current conditions; it’s about where the industry is heading. Related frameworks include industry life cycle analysis, Ansoff’s Matrix, SWOT, strategic group mapping, and key success factors (CFA Institute). For your company, the Ansoff matrix offers four growth strategies: market penetration, market development, product development, and diversification (Duke University CMO Survey). In the Duke CMO survey, market penetration was the most-used strategy at 54.1% (Duke University CMO Survey). That suggests most companies stick to what they know, but if you’re entering a new geographic market, you’re actually doing market development. You’d also run a SWOT analysis to match your strengths against external opportunities (Virginia Commonwealth University).

Step 6: Use Value Chain Analysis to Find Your Competitive Advantage

Finally, you need to figure out how you’ll win. Porter’s value chain divides a firm’s activities into primary and support categories (IBM Think). For your snack company, you might find that your inbound logistics are efficient because you source raw materials locally, giving you a cost advantage. Or you might differentiate through unique, sustainable packaging. The point is, value chain analysis helps you identify where you can create value. It supports two main types of competitive advantage: cost leadership and differentiation (IBM Think). In a crowded market, differentiation might be your best bet.

The Takeaway: Don’t Choose Between Frameworks—Use Them Together

Industry analysis is a multi-lens exercise. If you rely solely on PESTLE, you’ll miss the competitive dynamics that determine profit potential. If you rely solely on Porter, you’ll miss the macro shifts that can upend your market. The CFA Institute recommends both, and the data backs it up: the insights industry itself is growing because companies need exactly this kind of integrated analysis. So my recommendation is clear: start with PESTLE to scan the macro environment, then apply Porter’s Five Forces to the strategically relevant market, and use value chain analysis to decide how you’ll compete. That’s how you turn market trends into a strategic advantage.

Sources

• CFA Institute - https://www.cfainstitute.org/insights/professional-learning/refresher-readings/2026/industry-and-competitive-analysis
• Similarweb / Research and Markets - https://www.similarweb.com/blog/research/market-research/market-research-stats/
• Harvard Business School - https://www.hbs.edu/faculty/Pages/item.aspx?lang=en&num=34522
• Washington State University Libraries - https://libguides.libraries.wsu.edu/c.php?g=294263&p=4358409
• ESOMAR via Research World - https://researchworld.com/articles/drivers-of-our-142bn-insights-industry
• US DOJ Antitrust Division - https://www.justice.gov/atr/herfindahl-hirschman-index