The Structure-Conduct-Performance Model traces industry profitability to its root structural causes STRUCTURE-CONDUCT-PE

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The Structure Conduct Performance Model Traces Industry Profitability To Its Root Structural Causes Structure Conduct Pe 1 (97.36 KiB) Viewed 34 times

The Structure-Conduct-Performance Model traces industry profitability to its root structural causes STRUCTURE-CONDUCT-PERFORMANCE (SCP) MODEL Structure Conduct Performance Financial metrics • Economic Profit Competition focused on grabbing share or growing the pie in • Pricing Strategy Capacity Investments • R&D/M&A • Innovation ROE/ROCE% Value Creation • Total Shareholder Returns (TSR) Competitive Structure • Concentration - Number and size of firms (Herfindal Index) • Barriers to Entry and Exit • Vertical integration Type of firms (state-owned)? Cost Structure • Economies of scale (MES) • Fixed vs Variable costs Demand Structure Underlying Growth • Power/Size of customers • Sales (contract length, purchase frequency, switching costs etc) Growth Implicit collusion