Business Strategy
An Analysis of Indian Cement Industry Using Structure Conduct Performance (SCP) and Efficient Structure (ES) Paradigms†

Article Details
Pub. Date : Mar' 2019
Product Name : The IUP Journal of Business Strategy
Product Type : Article
Product Code : IJBS51903
Author Name : Manoj K Sharma and Arpit Khurana
Availability : YES
Subject/Domain : Management
Download Format : PDF Format
No. of Pages : 12

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Abstract

This paper focuses on the role cement industry plays in the Indian market and on the market Structure, Conduct, Performance (SCP) model. The paper includes a sample of top 11 cement firms in the Indian market. Annual and pooled data for a period of 15 years (2003-2017) is analyzed in the present study. The measure applied for the firm’s performance is Return on Assets (ROA). Concentration Ratio (CR) and market share are utilized to measure SCP hypothesis; advertising and R&D are used along with market share to check Efficient Structure (ES) hypothesis. The results indicate that market structure plays a significant role in determining the performance of cement firms.


Description

The performance of a firm is a subject that has attracted a lot of attention, comments and interests from both financial experts, researchers, the general public and the management of corporate entities. Yet, selecting the most successful firms has always proved to be a difficult task to many as a firm may have high level of profitability, but at the same time be in a bad situation regarding its liquidity. The performance of the company can be analyzed in terms of profitability, dividend growth, sales turnover, asset base and capital employed among others. However, there is still debate among several disciplines regarding how the performance of firms should be measured and the factors that affect the financial performance of companies (Liargovas and Skandalis, 2008). According to Iswatia and Anshoria (2007), performance is the function of the ability of an organization to gain and manage the resources in several different ways to develop competitive advantage.


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