Commodity is all good that is mass produced by humans, or which are
huge quantities available in nature, that has value or a low level of
use and a very low rate of differentiation. But this definition is
rather broad and reaches many different goods. However, there are many
goods that do not meet our definition of commodity and therefore are not
considered as such. Here are some examples.
Soybeans, corn and wheat, fall within our definition. They are mass-produced goods man. Gold, silver or oil also fall into our definition, as there are huge quantities available in nature. Regarding the level of differentiation or specialization, gold mined in different parts of the world, will have essentially the same qualities.
Other examples. Sea water is not a commodity and that although it is a very good availability, has no value or utility. The same will happen to the volcanic ash that except in rare cases, will have use of economic importance.
Soybeans, corn and wheat, fall within our definition. They are mass-produced goods man. Gold, silver or oil also fall into our definition, as there are huge quantities available in nature. Regarding the level of differentiation or specialization, gold mined in different parts of the world, will have essentially the same qualities.
Other examples. Sea water is not a commodity and that although it is a very good availability, has no value or utility. The same will happen to the volcanic ash that except in rare cases, will have use of economic importance.
Now,
why do not we say that a computer is a commodity? The answer is that
the level of differentiation is decidedly high, and specifications also
vary very widely. What we are talking computer? Does Dell,
Hewlett-Packard or Toshiba? Are we talking about laptops or desktop? We
might also add that each computer could differ materially in RAM memory,
hard disk capacity, the speed of the microprocessor, the graphics
board, etc.
Being in the presence of a well with a high level of differentiation, we'll be talking about a market with high profit margins compared with a market that has no differentiation and margins resulting from more meager profits (the latter is the case commodity market). It happens however, that when certain industry evolves so that many participants can do something that previously could only make a certain firm, speaking of 'commoditization' of a product or industry.
Examples of this can be found in the pharmaceutical industry where instead of just consumed drugs made by a particular laboratory, you can access the generic drug more cheaply. By 'this drug has become a commodity,' it is meant that there is no special distinction or especially wide margins to produce such drugs. Today one could say that aspirin, when in the beginning was undoubtedly an innovative and high margins for whom the product produced. Today, aspirin is a commodity, to the point that nobody makes a big difference between taking the one made by a laboratory or another.
Being in the presence of a well with a high level of differentiation, we'll be talking about a market with high profit margins compared with a market that has no differentiation and margins resulting from more meager profits (the latter is the case commodity market). It happens however, that when certain industry evolves so that many participants can do something that previously could only make a certain firm, speaking of 'commoditization' of a product or industry.
Examples of this can be found in the pharmaceutical industry where instead of just consumed drugs made by a particular laboratory, you can access the generic drug more cheaply. By 'this drug has become a commodity,' it is meant that there is no special distinction or especially wide margins to produce such drugs. Today one could say that aspirin, when in the beginning was undoubtedly an innovative and high margins for whom the product produced. Today, aspirin is a commodity, to the point that nobody makes a big difference between taking the one made by a laboratory or another.
No hay comentarios:
Publicar un comentario