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What is an Attractive Industry?

Management science, 1986-10, Vol.32 (10), p.1223-1230 [Peer Reviewed Journal]

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Title:
What is an Attractive Industry?
Author: Wernerfelt, Birger ; Montgomery, Cynthia A
Subjects: Analysis ; Business structures ; Competitive advantage ; Costs ; Diversification ; Economies of scope ; Efficiency ; Efficient markets ; firm performance ; Growth ; Growth industries ; Industrial concentration ; Industrial efficiency ; Industrial growth ; Industrial market ; Industry ; Market shares ; Mathematical analysis ; Measures ; Portfolio management ; Profitability ; Profitable firms ; Profits ; Strategic planning
Is Part Of: Management science, 1986-10, Vol.32 (10), p.1223-1230
Description: Business Portfolio Planning techniques often suggest that firms should invest in industries with high profitability, high growth, or other attractive characteristics. Critiquing this view, we suggest that the same factors which lead to high profitability in an industry may cause its inefficient participants to earn lower profits. Higher growth, on the other hand, may benefit inefficient firms while reducing the gains of efficient competitors. The paper offers theory and evidence to support this view of performance dependencies for the special case of diversified firms.
Publisher: Linthicum: INFORMS
Language: English
Identifier: ISSN: 0025-1909
EISSN: 1526-5501
DOI: 10.1287/mnsc.32.10.1223
CODEN: MNSCDI
Source: RePEc
ProQuest Central

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