The term industry refers to a group of enterprises whether private businesses or government-operated corporations that produce a specific type of good or service for example, the beverage industry, the gold industry, or the music industry. Some industries produce physical goods, such as lumber, steel, or textiles. Other industries such as the airline, railroad, and trucking industries provide services by transporting people or products from one place to another. Still other industries, such as the banking and restaurant industries, provide services such as lending money and serving food, respectively. The word industry comes from the Latin word industria, which means diligence, reflecting the highly disciplined way human energy, natural resources, and technology are combined to produce goods and services in a modern economy. Industries use a range of inputs, such as capital, technology, natural resources, labor, and management, to produce goods and services. In order to manufacture products, money is needed to purchase buildings, equipment, and machinery and to pay workers. This money is called finance capital. Buildings, machinery, and other equipment are referred to as physical capital. Physical capital, natural resources, and labor are combined to yield the final product, which is sold for money. The amount of money received that exceeds the cost of producing the good is called profit. Profit can be used to pay for another cycle of production. When profits are used to hire more labor and purchase additional physical capital, production expands and industrial growth occurs.
Alternative Investment
Alternative Investment is investing in something that is not financial. This includes investing in antiques, art, or commodities. In the UK a market that they use to sell such investments is the Alternative Investment Market (AIM). The Alternative Investment Market was launched on June 19 1995. It is sometimes referred to as the junior market. It was created by the Stock Exchange specifically to provide a source of raising capital for smaller and dynamic young companies as an alternative to the main market reliance on debt finance and venture capital. AIM is a different and distinct market from the official list as it is specifically for smaller, emerging companies. These may be young venture capital-backed companies, management buy-outs (MBOs), or family businesses. A worldwide association that focuses on the alternative investments is the Alternative Investment Management Association (AIMA). The said association is dedicated to represent the world’s alternative investment community. It tries to address the issues that affect the industry’s development. It reaches 46 countries on five continents. AIMA’s members contribute to the association by creating global tools that will benefit other members, institutional investors, and regulators.
Industry Organization
Industry Organization is competition between companies, company ease/difficulty getting into the industry, similar alternative investment products with companies & varying prices, top companies and reasons for success with products offered. In the said industry there is a little to no competition because it is not only relatively new to people‘s knowledge but it is not that familiar to them. Since the said industry is still in its early stages and the consumers may not yet know of such industry those who want to enter in the said industry is still free from tight competition. In getting into that industry any company can enter easily since the industry is relatively young additionally there are different institutions, and associations that help companies enter that industry. A reason for the success with the products offered is it being easier to sell, there are lesser risks involved when someone invests in a product.
Global Competition
Global Competition is competition between companies throughout the world and how it changes from one area to the next, different products offered in different parts of the world. In this industry global competition is not much tight unlike in other industries. Since this industry covers a smaller group of countries the situation in the industry of one country is not largely affected by the situation of the industry of another. The products offered in one country differ from the products offered in another country. This is affected by the culture, tradition, religion and trends in different countries. The alternative investment industries in the different countries follow the culture and tradition of the country they are in. It also makes sure that they are not committing anything negative against the religion of the country. The industry in different countries base the products being sold to the trends, and buying capacity of the consumers in a specific country.
Economies of Scale
Economies of Scale focus on operating leverage and merger activity. Economies of scale depend on the size of the area, on differences in tastes, on transportation costs, and so forth. The existence of economies of scale, then, does not imply that gigantic plants are necessarily more efficient than others of relatively smaller size, if the latter are specializing in a narrower range of products. Economies of scale may continue without a disintegration of the production process, however, in certain localized industries, such as waterworks, electricity plants, gasworks, brewing may tend to increase the size of the plant through diversification. In the alternative investment industry merger activity are not so common since there are few companies that will want to merge with other companies. There are lesser problems in the industry and some associations help companies in solving the problems they encounter in the said industry.
Regulatory Structures
Regulatory structures focuses on rules and regulations of the different types of investments in different parts of the world. It also focuses on government involvement, tax considerations, state/city subsidies, and government contracts. In the alternative investment industry rules and regulations of the different types of investments in different parts of the world are given proper attention. The industry follows any imposed law by the government. The government on the other hand makes sure that nothing will happen to the companies in the industry in a certain country. Taxes are paid accordingly and diligently. The industries are given clearance to conduct business in a certain country as long as they will follow the laws of the country, they pay taxes and other monetary obligations, they don’t cause any harm to the rights of the citizens of the country, and they respect the culture and tradition of the country. These conditions of the government of a country are part of the government contract.
Demographics
Demographics focus on age distribution most common, product fit most common for who and where, adaptability of the products from place to place and person to person, and outside worldly influences effecting company profits and growth. In the alternative investment industry they try to make sure that they base the products they intend to sale on the result of the study on the demographics. The demographics assists in making a right decision on what products will be sold and to whom it will be sold.
Conclusion
The Alternative Investment industry can be affected and is covered by many things like Industry Organization, Global Competition, Economies of Scale, Regulatory Structures, and Demographics. The way alternative investment industry is affected depends on different factors in different countries. The AIM and AIMA assists the industry and companies within it to adjust and contradict factors or situation that might give problems to it.
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