What factor is crucial for determining whether an industry offers a viable business opportunity?

The growth potential and profit outlook of an industry are critical factors in determining whether it presents a viable business opportunity because they directly relate to the overall attractiveness and sustainability of the market. If an industry is experiencing strong growth, it indicates increasing demand for its products or services, which can lead to higher revenues and profits for new entrants.

Additionally, understanding the profit outlook helps businesses assess potential return on investment. An industry with favorable profit margins can attract new competitors and encourage investment, leading to innovation and market expansion. These elements together create a conducive environment for success, making it essential for businesses to evaluate these aspects before entering a market.

While the other factors, such as competition's pricing strategies, the experience of key players, and the effectiveness of promotional campaigns, play a role in operational success, they do not provide as foundational a measure of overall industry viability as growth potential and profit outlook do. Assessing these helps to shape strategic decisions and long-term planning in business.