An analysis of factors that influence the growth and distribution n primary industries

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An analysis of factors that influence the growth and distribution n primary industries

Each industry has differences in terms of its customer base, market share among firms, industry-wide growth, competition, regulation and business cycles. Customers Some companies serve only a handful of customers, while others serve millions.

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One change in government policy could potentially wipe out all of its sales. For this reason, companies will always disclose in their K if any one customer accounts for a majority of revenues. Furthermore, this could also suggest that the company possesses some sort of " economic moat ," in other words, a competitive barrier serving to protect its current and future earningsalong with its market share.

Market share is important because of economies of scale. When the firm is bigger than the rest of its rivals, it is in a better position to absorb the high fixed costs of a capital-intensive industry. This is crucial because without new customers, a company has to steal market share in order to grow.

In some markets, there is zero or negative growth, a factor demanding careful consideration. However, that same company would probably have a rough time now due to the advent of newer technologies, such as CDs and MP3s.

The current market for audio compact cassettes is only a fraction of what it was during the peak of its popularity. Competition Simply looking at the number of competitors goes a long way in understanding the competitive landscape for a company.

Industries that have limited barriers to entry and a large number of competing firms create a difficult operating environment for firms. One of the biggest risks within a highly competitive industry is pricing power.

An analysis of factors that influence the growth and distribution n primary industries

This refers to the ability of a supplier to increase prices and pass those costs on to customers. Companies operating in industries with few alternatives have the ability to pass on costs to their customers.

A great example of this is Wal-Mart. They are so dominant in the retailing business, that Wal-Mart practically sets the price for any of the suppliers wanting to do business with them. If you want to sell to Wal-Mart, you have little, if any, pricing power.

As important as some of these regulations are to the public, they can drastically affect the attractiveness of a company for investment purposes. In industries where one or two companies represent the entire industry for a region such as utility companiesgovernments usually specify how much profit each company can make.

In these instances, while there is the potential for sizable profits, they are limited due to regulation. In other industries, regulation can play a less direct role in affecting industry pricing.

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For example, the drug industry is one of most regulated industries. And for good reason - no one wants an ineffective drug that causes deaths to reach the market.

As a result, the U. Food and Drug Administration FDA requires that new drugs must pass a series of clinical trials before they can be sold and distributed to the general public. However, the consequence of all this testing is that it usually takes several years and millions of dollars before a drug is approved.

Keep in mind that all these costs are above and beyond the millions that the drug company has spent on research and development. Investors should keep these regulatory costs in mind as they assess the potential risks and rewards of investing.Availability of electric power supply over wider areas and the increasing mobility of labour have reduced the influence of geographical factors on the location of industries.

An analysis of factors that influence the growth and distribution n primary industries

The non-geographical factors are those including economic, political, historical and social factors. These factors influence our modern industries to a great extent. As noted in the graph above, HP and Dell are currently the top two manufacturers in the industry. However, with the technological pressure that the market is experiencing, there is opportunity for one of the other firms to have a technological breakthrough and .

Jun 30,  · Highly developed countries recognize and focus on the four factors that affect economic growth and development: human resources, physical capital, natural resources and advancements in .

What factors influenced the Growth and Development of Industry? Industrial Revolution Labor Supply Unemployed Agricultural workers Enclosure Loss of Common Land Capital Investments of the wealthy merchants Technological.

Market analysis: Overall size, projected growth, profitability, entry barriers, cost structure, distribution system, trends, key success factors An environmental analysis is the fourth dimension of the External Analysis.

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The interest is in environmental trends and events that have the potential to affect strategy. This analysis should. looking to noncarbonated beverages for growth.” In order to fully understand the soft drink industry, the following should be considered: the dominant economic factors, five competitive sources, industry trends, and the industry’s key factors.

Based on the analyses of the industry, specific recommendations for competitors can then be created.

Factors Influencing the Location of Industries : Geographical and Non-Geographical Factors