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Chapter 2 , dominant economic features of the industry
Strategic Management
1.Whether industry profitability is above or below par 2. Whether certain industry activities are characterized by strong experience effects. I dont understand this two lines
Answers (1)
1. Industry profitability means average profitability of all companies in that industry. One of the features for an industry that we need to consider is its profitability w.r.t. other industries. Example, textile, garmenst industry has higher profitability vs Grocery Retail 2. Experience effects is learning by doing. The point means whether industry is such that costs of its activities reduce when done repetitively or period of time. For example in manufacturing, over a period of time, companies in the industry improves upon efficiency as they learn better ways of doing things
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