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53 companies will earn a profit above the average profit of the firms in the previous years.The remaining 44 companies lambda is below zero which indicates that the expecting profit of them are below the average profit rate of the firms in the previous years.In short 54.63% of the analysed 97 companies will earn a profit above the average profit and the remaining 45.36% of the firms expecting profit is below the average level. The profit rates of most of the firms are showing a trend of decline due to the competition in the market. Only highly efficient firms can earn profit more than the average level in the highly competitive market. The trend in the profit rate of firm is a reflection of the growth of the industry. A developing industry can ensure regular growth of firms in that industry. Hence in a matured industry most of the firms are showing a standing or declining trend in their growth and profit. Thus the results get from data analysis will be connected with the industry growth level in which the firms existing.
Conclusion
The study of the competitive market hypothesis by way of regression model reveals that there is a direct relation between the firms growth rate and the competitive factors in the specific industry. The trend in the profit rate of the firms will have to continue in future also in a competitive market. The firms are really struggling for existence and the profit matter is only after their existence. The profitability of firms depends its ability to change continually to meet the changing needs of the society. Only an experienced firm can forecast the change that have to taken place in future. The forecasting of future need of society is essential for the existence and growth of the firms in this changing world. The taste and need of customers are changing continually. The firms want to forecast these changes for modifying their existing product and services. It is said that todays growth products may be tomorrows earthen pots.
The growth stage of the industry will affect the profitability of the firms in the industry.
The identification of the profitable firms is useful for knowing the industrial growth.The analysis of the previous data of the firms regarding the profit and growth will helps to know how much firms can achieve their projected growth and profitability in their business. The regression model is highly helpful for the estimation of the profitable firms in a particular industry. The research work may be affected by the time variable. The data obtained for the research is not adequate. Detailed information about the financial position of firms is not available for discussion.
.it is presumed that the trend of the given values in the data will continue in future also. But this need not always happen.The analysis is based on the data and variable in the previous years. The accuracy and reliability of the estimation may be affected by the data used for the study.By considering these limitations it is an accepted model for data analysis.
The regression analysis has revealed that 44 out of 97 Croatian companies will make less profit for the current year with respect to average profit for the last year. These companies have to identify their core competency and concentrated on competitive priorities of cost
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