Definition and Types of Industries

Definition and Types of Industries

• An industry is a group of companies or organizations that produce goods or services that are related or similar.
• Industries can be categorized into different types, including:
  • Primary industries: extract and process natural resources, such as agriculture, mining, and forestry.
  • Secondary industries: manufacture and process goods, such as construction, manufacturing, and energy production.
  • Tertiary industries: provide services, such as healthcare, finance, and tourism.

Industry Life Cycle

• Introduction: new industry emerges, growth is slow, and profit margins are low.
• Growth: industry expands, growth accelerates, and profit margins increase.
• Maturity: industry reaches saturation point, growth slows, and profit margins stabilize.
• Decline: industry experiences decline, growth slows, and profit margins decrease.

Industry Structure

• Industry structure refers to the characteristics of an industry, including:
  • Barriers to entry: factors that prevent new companies from entering an industry.
  • Concentration ratio: percentage of market share held by top firms in an industry.
  • Degree of rivalry: intensity of competition among firms in an industry.

Industry Analysis

• Industry analysis involves examining an industry's structure, trends, and outlook to understand its attractiveness and potential for profitability.
• Key factors to analyze include:
  • Market size and growth rate
  • Competitive landscape
  • Customer needs and preferences
  • Technological advancements and innovations

Porter's Five Forces

• A framework for analyzing an industry's competitive environment, including:
  • Threat of new entrants
  • Bargaining power of suppliers
  • Bargaining power of buyers
  • Threat of substitute products or services
  • Competitive rivalry among existing competitors

Definition and Types of Industries

• An industry is a group of companies or organizations that produce goods or services that are related or similar.
• Industries can be categorized into three main types:
  • Primary industries: extract and process natural resources, such as agriculture, mining, and forestry.
  • Secondary industries: manufacture and process goods, such as construction, manufacturing, and energy production.
  • Tertiary industries: provide services, such as healthcare, finance, and tourism.

Industry Life Cycle

• The industry life cycle consists of four stages:
  • Introduction: new industry emerges, growth is slow, and profit margins are low.
  • Growth: industry expands, growth accelerates, and profit margins increase.
  • Maturity: industry reaches saturation point, growth slows, and profit margins stabilize.
  • Decline: industry experiences decline, growth slows, and profit margins decrease.

Industry Structure

• Industry structure refers to the characteristics of an industry, including:
  • Barriers to entry: factors that prevent new companies from entering an industry.
  • Concentration ratio: percentage of market share held by top firms in an industry.
  • Degree of rivalry: intensity of competition among firms in an industry.

Industry Analysis

• Industry analysis involves examining an industry's structure, trends, and outlook to understand its attractiveness and potential for profitability.
• Key factors to analyze include:
  • Market size and growth rate.
  • Competitive landscape.
  • Customer needs and preferences.
  • Technological advancements and innovations.

Porter's Five Forces

• A framework for analyzing an industry's competitive environment, including:
  • Threat of new entrants.
  • Bargaining power of suppliers.
  • Bargaining power of buyers.
  • Threat of substitute products or services.
  • Competitive rivalry among existing competitors.