Difference between revisions of "Industry Structure"
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== Description == | == Description == | ||
The comeptition and concentration of the industry will affect the creation of software<br> | Some industries are more profitable than others, and industry profitability can change over time.The comeptition and concentration of the industry will affect the creation of software. | ||
The industry structure consists of many types of suppliers and customers, including products and services, software and hardware, applications and infrastructure. The industry is trending away from large vertically integrated suppliers to a fragmented structure with many more specialized suppliers coordinating themselves through open interface standards, consortia, technology alliances, etc. Both the computer and communications industries are evolving away from stovepipe products based on a single application to integrated layers that service all applications.<br> | |||
== Enablers == | == Enablers == | ||
| Line 11: | Line 12: | ||
*Company Size | *Company Size | ||
Presence of one large company can lead to monopoly. A monopoly is an enterprise that is the only seller of a good or service. | Company size can affect the industry in two ways: | ||
Presence of one large company can lead to monopoly. A monopoly is an enterprise that is the only seller of a good or service.<br> | |||
Similarly if there can be large number of small firms in industry, creating high price competition and driving down productivity.<br> | |||
* | *Technological expertise | ||
Specifically for software industry the technological expertise to create and maintain software is clear driving the strenght of the software industry. <br> | |||
* | *Brand Name/Image | ||
Consumers are some vary of accepting software that is not branded due to support and service related issues. This leds to software companies investing heavly in brand equity. Brand image is also driven by company size, thus it in turn affects the industry structure. | |||
== Inhibitors == | == Inhibitors == | ||
* Technology Industry | * Technology Industry | ||
A fall of industry can inhibit the growth of industry. <br> | A fall of industry can inhibit the growth of industry. <br> | ||
| Line 39: | Line 33: | ||
== Timing == | == Timing == | ||
== Web Resources == | == Web Resources == | ||
http://www.econlib.org/library/Enc/IndustrialConcentration.html | http://www.econlib.org/library/Enc/IndustrialConcentration.html | ||
Revision as of 14:15, 17 May 2006
Name
Industry Structure
Description
Some industries are more profitable than others, and industry profitability can change over time.The comeptition and concentration of the industry will affect the creation of software.
The industry structure consists of many types of suppliers and customers, including products and services, software and hardware, applications and infrastructure. The industry is trending away from large vertically integrated suppliers to a fragmented structure with many more specialized suppliers coordinating themselves through open interface standards, consortia, technology alliances, etc. Both the computer and communications industries are evolving away from stovepipe products based on a single application to integrated layers that service all applications.
Enablers
- Concentration
Industrial concentration occurs when a small number of companies sell a large percentage of an industry's product. The number firms creating software would drive the competition in the software industry. This is important factor since this can drive the prices of the product in industry.
- Company Size
Company size can affect the industry in two ways:
Presence of one large company can lead to monopoly. A monopoly is an enterprise that is the only seller of a good or service.
Similarly if there can be large number of small firms in industry, creating high price competition and driving down productivity.
- Technological expertise
Specifically for software industry the technological expertise to create and maintain software is clear driving the strenght of the software industry.
- Brand Name/Image
Consumers are some vary of accepting software that is not branded due to support and service related issues. This leds to software companies investing heavly in brand equity. Brand image is also driven by company size, thus it in turn affects the industry structure.
Inhibitors
- Technology Industry
A fall of industry can inhibit the growth of industry.
Paradigms
Nil
Experts
Timing
Web Resources
http://www.econlib.org/library/Enc/IndustrialConcentration.html