WEEK 4|Analysing industry level data: Flashcards
Industry definition and classification codes, IIP and PMI, industry market structure and concentration indices, competitive positioning in an industry - Porter's five forces. Analysis examples: Cement industry, Textile industry, FMCG industry, IT industry
What are the major industry classifications?
- Labour
- Raw Material
- Ownership
4.Source of Raw Material - Miscellaneous
What are the types of Labour Industry?
- Large Scale
- Medium scale
- Small Scale
What are the types of Raw material industry?
- Heavy
- Light
What are the types of ownership industry?
- Private Sector
- Public sector
- Joint Sector
- Co-operative sector
- Multi-nationals
What are the types of source of raw material?
- Agro-based
- Mineral based
- Pastoral based
4.Forest based
What are the various Miscellaneous industry types?
- Village
- Cottage
- Consumer
- Ancillary
- Basic
- Basic
- Captial Intensive
8.Labour intensive
What are large scale industry?
Industries which employ a large number of labourers in each unit are called large-scale industries. Cotton or jute textile industries are large scale industries
What are medium scale industries
The industries which employ neither very large nor very small number
of labourers are put in the category of medium scale industries. Cycle
industry, radio and television industries are some examples of medium
scale industries
What are small scale industries?
Industries which are owned and run by individuals and which employ a small number of labourers are called small scale industries.
What are heavy industries?
Industries which use heavy and bulky raw-materials and produce products of the same
category are called heavy industries. Iron and steel industry presents a good example of
heavy industries
What are light industries?
The light industries use light raw-materials and produce light finished products. Electric
fans, sewing machines are light industries.
What are private Sector Vs. Public Sector Vs. Joint Sector Vs. Co-operative sector industries?
Private Sector Industries:
* Industries owned by individuals or firms such as Bajaj Auto or TISCO are called private
sector industries.
Public Sector Industries:
* Industries owned by the state and its agencies like Bharat Heavy Electricals Ltd., or Bhilai
Steel Plant or Durgapur Steel Plant are public sector industries.
Joint Sector Industries:
* Industries owned jointly by the private firms and the state or its agencies such as Gujarat
Alkalies Ltd., or Oil India Ltd. fall in the group of joint sector industries.
Co-operative Sector Industries:
* Industries owned and run co-operatively by a group of people who are generally
producers of raw materials of the given industry such as a sugar mill owned and run by
farmers are called co-operative sector industries
What are Agro based industries?
Agro based industries are those industries which obtain raw-material from
agriculture. Cotton textile, jute textile, sugar and vegetable oil are
representative industries of agro-based group of industries
What are mineral based industries?
The industries that receive raw materials primarily from minerals such as
iron and steel, aluminium and cement industries fall in this category.
What are pastoral based industries?
These industries depend upon animals for their raw material. Hides, skins,
bones, horns, shoes, dairy, etc. are some of the pastoral-based industries.
What are forest based industries?
Paper card-board, lac, rayon, resin, tanning of leather, leave- utensils,
basket industries are included in this type of industries.
What are village industries?
Village industries are located in villages and primarily cater to the needs of
the rural people. They usually employ local machinery such as oil extraction,
grain grinding and agricultural implements
What are cottage industries?
Industries which artisans set up in their own houses, work with wood, cane,
brass, stone, etc. are called cottage industries. Handloom, khadi and leather
work at the artisans house fall in this category
What are consumer goods industries?
Consumer industries convert raw materials or primary products into
commodities directly used by the people. Textiles, bakeries, sugar, etc. are
some of the consumer goods industries.
What are ancillary industries?
The industries which manufacture parts and components to be used by big
industries for manufacturing heavy articles like trucks, buses, railway
engines, tractors, etc. are called ancillary industries.
What are basic industries?
Industries on which depend many other industries for their
manufacturing processes are called basic industries. Iron and steel
industry and power generating industry are included in this category
What are capital intensive industries?
- Industries requiring huge investments are called capital-intensive
industries. Iron and steel, cement and aluminium are outstanding
examples of capital-intensive industries
What are labour-intensive industries?
Industries which require huge labour force for running them are called
labour-intensive industries. In these industries, labour is more important
than capital. Shoe- making and bidi-manufacturing, etc. are included in
these industries
what is Annual Survey of Industries (ASI)?
The Annual Survey of Industries (ASI) has been the principal source for most of the basic statistics of the Industrial Sector
The frame of factories, which the ASI uses for conducting the survey, is based on the list of factories maintained by the Chief Inspectors of Factories
(CIF).
How are growth rates estimated?
- Estimates of the growth rates of industrial production based upon the Index of Industrial Production (IIP) are extensively used for policy-making at various levels in the Government and also for decision-making in the banking
and Corporate Sectors.
The importance of IIP is further increased due to the fact that it is the only indicator generated every month and disseminated on a wide scale.
What is Purchasing Managers’ Index (PMI)?
The Purchasing Managers’ Index (PMI) is an index of the prevailing
direction of economic trends in the manufacturing and service sectors.
* It consists of a diffusion index that summarizes whether market
conditions, as viewed by purchasing managers, are expanding, staying the
same, or contracting.
* The purpose of the PMI is to provide information about current and future business conditions to company decision makers, analysts, and investors.
* Investors can also use the PMI to their advantage because it is a leading indicator of economic conditions.
* The direction of the trend in the PMI tends to precede changes in the trend in major estimates of economic activity and output, such as the GDP, Industrial Production, and Employment.
* Paying attention to the value and movements in the PMI can yield
profitable foresight into developing trends in the overall economy
What are 5 key indicators under PMI?
- New orders
- Inventory levels
- Production
- Supplier Deliveries
- Employment Environment
How to measure an industry’s concentration?
- Concentration ratio
- Herfindahl index
What is concentration ratio?
The concentration measures an industry’s concentration by examining the share of output controlled by the largest four firms in that industry.
- this could be measured in terms of sales, value added, or other metric.
- Data published every 5 years by the Census Bureau of Economic Census in the US.
What are the problems with concentration ratio?
- If four firms share all output, their concentration ratio is equal to 100% but they are not a monopoly.
- But if one firm is the sole producer, its concentration ratio is equal to 100% and it is a monopolist.
How is Herfindahl index solves the problems with concentration ratio?
The herfindahl index is calculated in three steps:
1. Determine the percent of output produded by each of the largest four firms.
2. Square each of those shares
3. Add all the squared numbers.
