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In: Economics

Economic theory implies that a mature industry without any significant technological change will tend to have...

Economic theory implies that a mature industry without any significant technological change will tend to have firms with similar architectural structures, similar reward structures, and similar performance systems. Would the power of the marketplace be important in this case?

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Expert Solution

A mature industry without any technological changes tends with similar architectural structure, reward structure and similar performance. These factors where determined on the basis of the market. Like; if that mature industry, having a strong power in the market can maintain their place in the market. There is no matter for their reward, performance and architectural structure. This mature industry remains a strong competitor among the new entrants. Mature industries having economies of scale, low cost of inputs, piecemeal productivity moves and low overheads. The matured industries can increase its standardization at low level. Mature industries can get high salaries and benefits and good name in the economy. There is a cost reduction of through outsourcing, headcount reduction and downsizing. A mature industry having large market share, earnings and profit. This mature industry creates opportunities for new investors especially equity and debt investors.


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