By John Lipczynski
This new version of business association improves at the luck of the 1st version, supplying a powerful hyperlink among the idea and research of business economics and giving genuine international program of the speculation to the company surroundings. vast case experiences supply brilliant and wonderful descriptions of commercial marketplace buildings and company options and behavior. This ebook is preferrred to scholars on an intermediate or complicated point path in business business enterprise or business Economics.
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Extra info for Industrial Organisation: Competition, Strategy, Policy, 2nd Edition
To what extent is each firm’s product unique? Any change in the characteristics of the product supplied by one firm, whether real or imagined, may affect the shares of the total market demand that each firm is able to command. n Vertical integration and diversification. Vertical integration refers to the extent to which a firm is involved in different stages of the same production process. Diversified firms produce a variety of goods or services for several distinct markets. The extent to which a firm is vertically integrated or diversified is likely to have implications for conduct and performance.
However, it is not possible for the firm to change the amount of capital it employs at short notice. New factories or offices take time to construct. New capital equipment has to be ordered in advance, and orders take time to be fulfilled. Accordingly, for a firm that employs two factors of production, labour and capital, it is usual to assume labour is variable in the short run, and capital is fixed in the short run but variable in the long run. qxd 26/5/05 13:57 Page 25 . 2 Production and costs 25 A general expression for the long run production function of a firm that uses a labour input and a capital input is as follows: q = f(L, K) where L = units of labour employed, K = units of capital employed, and q = units of output produced.
4 Strategic management: a short diversion A number of tools developed in the industrial organization literature have contributed to the growth of the sub-discipline of strategic management. Highly influential in the early development of this literature is Porter (1979a, 1980, 1985, 1996), whose five forces model of the firm’s competitive environment is heavily SCP-influenced. Porter’s five forces are: the extent and intensity of competition; the threat of entrants (new .. qxd 26/5/05 13:56 Page 17 .