Before you analyze a company, understand the industry it operates in. Some industries generate consistently high returns (software, credit bureaus). Others destroy capital regardless of management quality (airlines, steel). Industry structure determines the upper bound on profitability.

Porter's Five Forces helps you understand competitive intensity. Moat analysis identifies sustainable advantages. Market structure reveals whether winners can compound or whether competition erodes returns.

In this topic, you'll learn to analyze industry attractiveness, identify competitive moats, and understand why some companies sustain high returns while others struggle.