The (also Industrial Organization or Industrial Economics) is an economical beginning, which is occupied with the mechanisms, which affect by offerer concentrations and market demarcations marked markets, thus on imperfect markets in the sense of the Neoklassik. Since the modern under resort to the mathematical game theory is concerned ever more also with the courses of action of individual enterprises, the got also increasingly meaning for the management economics, in particular the strategic management.

History of the beginning

The occupation with markets, on which only imperfect competition prevails, goes back into the thirties of the 20-century. In this time different economists recognized the fact that of the Neoklassik the welfare overall economic as ideally outstanding perfect competition under criteria not necessarily when desirably could be regarded. Into the 1950er years was it then an economist Joe S. Bain, who classified the different forms of imperfect competition on the basis of extensive empirical studies than first. Furthermore it described rules, according to which enterprises, which are established on such imperfect markets, can make more difficult and/or refuse new competitor the Marktzugang. Bain coined/shaped the English name of this branch of research (Industrial Organization) by the publication of a book of the same name.

In the 60's and 70's the concepts Bains were continued to prepare on the one hand, especially its concept of the market entrance barriers was extended by those the withdrawal and the mobility barriers. On the other hand one began to apply concepts of the mathematical game theory to the in order to become better fair with it the mutual dependence on established offerer and potenziellem newcomer.

Beginning of the 80's would apply the economist Michael E. Porter so far the welfare-theoretically aligned to private firms and began to the question to follow, which teachings the individual enterprise under strategic criteria could draw from the realizations of the It justified one of the most influential schools strategic managements, the so-called Market Based View with this beginning.

Fundamentals of the beginning

The Industrial Organization research asks for the influence, which the structure (the organization) of an industry and/or a oligopolyistic group has within an industry on the behavior and thus the economic success of the members of the industry and/or the group. Since the wants to explain the economic success of enterprises from the market structure, working the relevant parameters of the market structure and one out has that the following classification of possible market formations for it a special meaning. Bain differentiates markets and/or industries along three parameters:

• the degree of the offerer concentration,
• the degree of the product differentiation and
• the height of the entrance barriers of the industry or the market.

Offerer concentration

When industry marks Bain sub-groups of enterprises within the economic sectors, those, since their products in the eyes of the potenziellen buyers represent strong substitutes and address a common group of buyers (are), in the direct competition with one another stand. The concentration of the offerers within an industry, operationalisiert as the number of competitors and the size of their individual market shares, is considered of Bain primarily for two reasons important: With a higher offerer concentration the incentive for the individual competitor with its competitors rises to cooperate, in order to specify together a profit-increasing "“industrial price"”, which can correspond to a monopolyistic price or approximate at least this, and appropriate outputs. Parallel the incentive sinks for aiming at by independent competitive policy an enlargement of the own market share and profit for the individual competitor who can go only in each case at expense of the competitors.

Product differentiation

Bain regards product differentiation of the point of view (potenziellen) of the buyers of a property. The more strongly two goods appear a buyer than different, the less represent a substitute for the other one and the smaller the cross elasticity to the demand of both goods will be. So regarded the product differentiation stands in a close relationship with Bains concept of the industry, which is characterized by the fact that to an industry the substitutes relatively good represent to products belonging to in the eyes of the buyers. Within an industry it is therefore necessary for the existence of product differentiation that different buyer categories evaluate different competitive products differently. Then, with same product prices, certain buyers will acquire the product, other one a competition product and, with different prices, certain buyers will be ready to pay a higher price for a more highly estimated product while others will have to be induced only due to relatively smaller prices to the purchase. With the existence of product differentiation each offerer has due to the different preferences, which bring different buyer categories to the different products, a more or less large price clearance, within whose he can vary the price of its product, without losing with price increases all customers and/or to take with price reductions the competitors away the customers.

Entrance barriers

Central element of the market structure analysis of the are the entrance barriers. The concept of the entrance barriers differentiates those between enterprises, with respect to an industry is established already and the market with their products supplies (offerer established) and such enterprises, which are not established in the industry, this however by the building of a new factory and use of their production capacity for an offer on the market to try could (potential offerers). Enterprises, which "“buy themselves, do not rank"” by the acquisition of a factory already existing into an industry Bain explicitly not among the potential offerers, since thereby the production capacity of the industry is not changed.

The height of an entrance barrier refers to the extent, in which established offerers can in the long term their asking prices over the given the competition level by the minimum average costs lift, without which potenzielle offerers become lively the entrance into the industry, the entrance barrier price. The fact that usually neither the group of the established, still the group of the potential offerers is homogeneous, carries Bain by a further distinction calculation: It differentiates between direct and general entrance conditions. The direct entrance conditions refer to the proportional surplus of the asking price over the minimum average costs, which the established offerer protected most strongly by the entrance barriers can require, without causing the entrance to few disadvantaged potential offerers. The general entrance conditions refer to the consequence of the values of the direct entrance conditions, which would develop, if the potential offerers - in the order of rising disadvantage by the entrance barriers - would be established successively in the industry.

Classical way three groups are called by entrance barriers:

1. Advantages of established offerers due to scale yields,
2. Advantages due to absolute cost advantages and
3. Advantages, which enjoy established offerers due to product differentiation.

Literature

Standard works:

• Bain, J.S., Barries ton of new competition, Cambridge (measure.) 1956
• Bain, J.S., Industrial organization, 2nd. OD., New York 1968
• Tirole, Jean: The Theory OF Industrial Organization, Cambridge, mA, 1988

Connection of and strategic management:

• Caves, R./Porter, Michael E., From entry barriers tons mobility barriers: Conjectural decisions and contrived deterrence tons of new competition, in: Quarterly journal OF Economics, 91/1977, P. 241-261.
• Porter, Michael E., The contributions OF industrial organization tons strategic management, in: Academy OF management Review, 6/1981, P. 609-620.

Articles in category "Industrieomik"

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