IndustriesNew
Whatever industry a case lands in, know how the business works: who does what, where the money is made, and what to ask first. Every brief opens with a one-minute summary; the full brief takes 6 to 11 minutes.
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Understand any industry in ten minutes
You do not need to know every industry. You need one way of looking at any business, and a few patterns that repeat.
Learn the scan
A short routine for sizing up any industry fast.
Getting industry-aware fast: the 10-minute industry scanKnow the building blocks
Value chains, unit economics, costs and business models.
Spot the pattern, then read a brief
Most industries follow one of a few business models. Each pattern tells you the first questions to ask.
All industries
What do “typical margin” and “capital intensity” mean?
- Typical margin:
- Roughly how much of every 100 of sales (or income) is left as profit after the running costs. A few percent is thin; 30 percent or more is fat. More on margin
- Capital intensity:
- How much money must be tied up in assets, such as buildings, machines and stock, to run the business. Low means little money is tied up in buildings, machines or stock, so growing is cheap. Very high means very large sums must be tied up before the business earns anything, so the cost of that money weighs heavily on profit. More on capital intensity
Consumer (6)
- RetailRetailers buy goods from suppliers and sell them to shoppers in stores and online, keeping a small margin on every sale.Typical margin: 2 to 5 percent in groceryCapital intensity: Medium
- E-commerce and quick commerceOnline shops and marketplaces sell goods through websites and apps and deliver them to the door, some within 10 to 30 minutes.Typical margin: Thin or negativeCapital intensity: Medium
- Consumer goods (FMCG)Consumer goods companies make the branded food, drinks, soap, shampoo and other everyday products people buy often, and sell them through shops and distributors.Typical margin: 10 to 22 percent for large brand ownersCapital intensity: Medium
- Restaurants and food serviceRestaurants, cafes, fast food chains and caterers turn ingredients and staff time into meals, served at the table, at the counter or delivered.Typical margin: 10 to 20 percent at restaurant levelCapital intensity: Medium
- Luxury and fashionLuxury houses and fashion brands design, make and sell clothes, handbags, shoes, jewellery, watches and beauty products, from very expensive and rare to cheap and fast.Typical margin: 20 to 40 percent for the strongest luxury brandsCapital intensity: Medium
- Hotels and travelHotels rent rooms by the night, and travel companies such as online travel agencies earn a cut for bringing them guests.Typical margin: About 15 to 20 percent for listed hotel groupsCapital intensity: High
Financial services (5)
- Retail and commercial bankingBanks keep people's and companies' money, lend it out to families and businesses, and move payments, earning mostly from the gap between what borrowers pay and what savers get.Typical margin: About 25 to 45 percent of total income as profit before tax in normal yearsCapital intensity: High
- InsuranceInsurers take a small, certain payment (the premium) from many people and promise to pay the few who suffer a loss, such as a car crash, a fire, an illness or a death.Typical margin: Underwriting result often minus 5 to plus 10 percent of premiumCapital intensity: Medium
- Payments and fintechPayments companies move money from the person paying to the person being paid, by card, bank transfer, wallet or app, and each company in the chain takes a small fee.Typical margin: Very wide: about 60 percent at card schemesCapital intensity: Low
- Asset and wealth managementAsset managers and wealth managers look after other people's savings, investing them in shares, bonds and other assets, and charge a small yearly fee on the money they manage.Typical margin: About 30 to 40 percent for established managersCapital intensity: Low
- Private equity and venture capitalPrivate equity and venture capital firms raise money from big investors, buy stakes in companies, try to make them worth more over a few years, and then sell them.Typical margin: Buyouts aim for about 2 to 2.5 times the money over five yearsCapital intensity: Low
Technology and media (8)
- Media and entertainmentMedia companies make or buy films, shows, music, games and sport, then earn from them through subscriptions, advertising, sales and licences.Typical margin: About 10 to 15 percent for listed media groupsCapital intensity: Medium
- Software and SaaSCompanies write software once and rent it to businesses and people as a monthly or yearly subscription delivered over the internet.Typical margin: 20 to 35 percent for mature leadersCapital intensity: Low
- Internet platforms, marketplaces and digital adsApps and websites that connect people, such as buyers and sellers, riders and drivers, or users and advertisers, and keep a cut of what flows between them.Typical margin: 10 to 40 percent for scaled leadersCapital intensity: Medium
- Telecom: mobile and fixed networksCompanies build mobile and broadband networks and charge people and businesses a monthly fee to use them for calls and data.Typical margin: 15 to 25 percentCapital intensity: High
- Semiconductors and electronics hardwareCompanies design and make the tiny chips inside phones, cars, computers and AI servers, and assemble them into finished electronic devices.Typical margin: About 35 percent on averageCapital intensity: High
- Data centres, cloud and AI computeCompanies build buildings full of computers, fill them with power and cooling, and rent out space or computing time to businesses, cloud users and AI labs.Typical margin: About 20 percent for colocation leadersCapital intensity: Very high
- CybersecurityCompanies sell software and services that stop criminals and spies from breaking into other companies' computers, stealing data or locking systems.Typical margin: Gross margin about 75 to 80 percent for software vendorsCapital intensity: Low
- Sports and live eventsClubs, leagues, venues and concert promoters put on games, tournaments and shows, and earn money from broadcasters, sponsors and the fans who buy tickets.Typical margin: About 0 to 5 percent for most European clubs and concert promotersCapital intensity: Medium
Health (2)
- Pharma, biotech and medtechCompanies that invent, test, make and sell medicines and medical devices, from pills and vaccines to heart stents and scanners.Typical margin: About 30 percent for large pharmaCapital intensity: Medium
- Healthcare providers and payersHospitals, clinics and doctors who give care, and the governments and insurers who pay for it.Typical margin: About 13 percent for US-listed hospital operatorsCapital intensity: High
Energy and resources (5)
- Agriculture and foodFarms grow crops and raise animals, and traders, processors and shops turn them into the food people buy.Typical margin: About 5 percent for listed farming companiesCapital intensity: Medium
- Oil and gasCompanies find crude oil and natural gas underground, move it by pipe and ship, and turn it into fuels such as petrol, diesel and jet fuel.Typical margin: 5 to 25 percent, swinging with the oil priceCapital intensity: Very high
- Power and renewablesCompanies make electricity from gas, coal, nuclear, sun, wind and water, carry it over wires to homes and businesses, and bill customers for it.Typical margin: 15 to 25 percent for generators and gridsCapital intensity: Very high
- Mining and metalsCompanies dig up rock that holds a little metal, separate the metal out, and sell it to makers of wires, steel, cars, batteries and buildings.Typical margin: 20 to 40 percent for miners at good pricesCapital intensity: Very high
- ChemicalsCompanies turn oil, gas, salt and minerals into plastics, fertilizers, paints, glues and thousands of other materials that go into almost everything.Typical margin: 2 to 5 percent for commodity chemicals near the bottom of the cycleCapital intensity: High
Industrial and mobility (5)
- Airlines and aviationAirlines sell seats on flights, using aircraft that they often rent from lessors and airports that charge them for every landing and passenger.Typical margin: About 2 to 7 percent for the industryCapital intensity: Very high
- Logistics and shippingCompanies that move and store other companies' goods: by ship, plane, train and truck, through ports and warehouses, to the shop or the front door.Typical margin: About 7 percent for listed transport and trucking companiesCapital intensity: High
- Automotive and electric vehiclesCarmakers design and assemble cars, scooters and trucks from thousands of parts bought from suppliers, and sell them through dealers who also service and finance them.Typical margin: 2 to 8 percent for most carmakersCapital intensity: High
- Industrial manufacturing and aerospaceCompanies build machines, electrical equipment, aircraft and engines, then earn money for decades by supplying parts and service for them.Typical margin: 8 to 20 percent, higher where the aftermarket is largeCapital intensity: Medium
- Defence and spaceCompanies design, build and support military equipment for governments, and launch and run satellites that sell internet, images and navigation.Typical margin: About 9 to 15 percent for large defence contractorsCapital intensity: High
Infrastructure and services (3)
- Construction and real estateDevelopers plan buildings and infrastructure, contractors build them, and owners and investors rent them out or sell them.Typical margin: About 6.5 percent for contractorsCapital intensity: Very high
- Professional services and consultingFirms sell the time and expertise of skilled people (consultants, auditors, lawyers and IT engineers) to companies and governments, charged by the hour, by the project or by the result.Typical margin: 10 to 25 percent for listed firmsCapital intensity: Low
- Water, waste and utilitiesCompanies and public bodies supply clean water, take away and clean dirty water, and collect, recycle, burn or bury the rubbish that homes and businesses throw away.Typical margin: About 15 to 30 percent EBITDA margin for large operatorsCapital intensity: Very high
Public and social (2)
- Education and edtechSchools, universities, tutoring companies and learning apps teach people, paid for by governments, parents, employers or the learners themselves.Typical margin: About 10 to 15 percent for listed education companiesCapital intensity: Medium
- Government, public sector and non-profitsGovernments, public agencies and charities that use taxes, borrowing and donations to provide services such as schools, hospitals, roads and benefits.Typical margin: Not a profit businessCapital intensity: Medium