INDUSTRIAL ORGANIZATION AND POLICY

Industrial organization is a field of economics that studies the strategic behavior of firms, the structure of markets and their interactions. The study of industrial organization adds to the perfectly competitive model real-world frictions such as limited information, transaction costs, costs of adjusting prices, government actions, and barriers to entry by new firms into a market that may be associated with imperfect competition. It then considers how firms are organized and how they compete. Industrial organization studies the firm strategies that are characteristic of market interaction: price competition, product positioning, advertising, research, development. The Industrial Policy plan of a nation denotes a nation's declared official, total strategic effort to influence sectoral development.

INDUSTRY
Industry refers to manufacturing productive enterprises collectively, especially as distinguished from agriculture. Also means any large-scale business activity such as tourism industry. In other words, industry refers to the production of an economic good (either material or a service) within an economy. Industry is divided into three sectors. They are: Primary This involves the extraction of resources directly from the Earth; this includes farming, mining and logging. They don't process the products at all. Secondary This group is involved in the processing products from primary industries (manufacturing). This includes all factoriesthose that refine metals, produce furniture, or pack farm products such as meat. Tertiary This group is involved in the provision of services. They include teachers, managers and other service providers. Sometimes, one talks about a quaternary sector of industry, consisting of intellectual services such as research and development As a country develops people move away from the primary sector to secondary and then to tertiary. There are many other different kinds of industries, and often organized into different classes or sectors by a variety of industrial classifications. Market-based classification systems such as the Global Industry Classification Standard and the Industry Classification Benchmark are used in finance and market research. These classification systems commonly divide industries according to similar functions and markets and identify businesses producing related products. Industries can also be identified by product: chemical industry, petroleum industry, automotive industry, electronic industry, meatpacking industry, hospitality industry, food industry, fish industry, software industry, paper industry, entertainment industry, semiconductor industry, cultural industry, poverty industry.

THE ROLE OF STATE

The ability of a firm to alter the market price of a good or service is called market power. In perfectly competitive markets, market participants have no market power. A firm with market power can raise prices without losing its customers. The goal of the state is to crate an environment which will enhance competition between the firms or at least it will not allow the strength of the industrial power. A controlled market is the provision of goods or services that is regulated by a government appointed body. The regulation may cover the terms and conditions of supplying the goods and services and in particular the price allowed to be charged and to whom they are distributed. It is common for a regulated market to control natural monopolies such as aspects of telecommunications, water, gas and electricity supply.

EXAMPLE OF AN INDUSTRY IN GREECE

Greek Sugar Industry The main product of the Greek Sugar Industry is white granulated sugar quality STANDARD (EEC Class II), produced by the processing of sugar beet. THE GREEK SUGAR INDUSTRY SA processes over 1,500,000 tons of sugar beet per year and has the potential to produce over 158,000 tonnes of sugar and cover the entire domestic consumption. To this end, the company collaborates with some 5,000 beet growers from central Greece to Eastern Macedonia and Thrace. The harvesting and milling of beet for sugar production (campaign), made from August to December each year, lasting an average of 80 days and takes place in three factories of the company: Square, Serres and Orestiada. The liquid wastes from the production are cleaned in special facilities and the sludge from the waste generated is used as a conditioner. Competition - Position of the Industry The company exports significant quantities of sugar in Bulgaria coming from the neighboring factories of Serres and Orestiada. By-products of sugar such as molasses and the zacharopita cover the needs of industries and farmers in the internal market and the excess is exported to EU countries or in third countries. TONNAGE 2004/20052005/2006 2006/2007 2007/2008 2008/2009 Annual Production 259.500 310.178 184.806 78.388 157.375 Sales of sugar production Sales of sugar import 155.549 75.051 346.307 58.579 404.886 247.840 65.712 313.552 88.215 82.052 170.267 169.783 56.729 226.512

Total Sales G.S.I. 230.600 * Source: technical services