The working assumption here is that the cocaine and heroin industries are similar enough that both can be analyzed within the same framework. A conventional industry analysis is accompanied by an effort to identify and assess those characteristics that are peculiar to the product and that stem from the illegal nature of the drug industry. The industry analysis presented here draws upon five major factor: extent of the rivalry between existing firms, number and kind of potential entrants, bargaining power of the buyers or consumers, bargaining power of suppliers, and the threat of substitute products or services. The analysis highlights that the drug industry is large, highly sophisticated, and resistant to efforts to control and eradicate it. However, there are possibilities for more effective efforts to counter narcotics trafficking, which lead to the recommendations suggested here. 44 notes