© 2000 John Petroff
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© 2000 John Petroff |
A- Classification of industries
In order to study how a firm compares to its competitors, it is naturally necessary to define the industry to which a company belongs (as suggested in Chapter 5 Section D-1). This is far from being a simple matter, as will be seen in following subsection. Industry classifications are also not as precise as one may wish; or when they are, it can be close to impossible to place a given firm in one of the narrowly defined classifications. As a result, it is often necessary to make compromises in comparing firms to groupings that are not ideal, but only rough approximations. Because of that, the most simplistic and most general classification of firms as growth or cyclical can be sometimes more informative than working with rigid narrow definitions.
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