Understanding the Industry-Based Model: Definition, Benefits, and Applications

In business and manufacturing, the industrial-based model represents a fundamental approach to organizing production processes. The purpose of this article is to provide a comprehensive understanding of the industrial-based model by exploring its definition, key characteristics, benefits, and practical applications. By delving into this topic, we can gain insight into how industries have evolved and how this model continues to shape modern economic systems.

Section 1: Defining the Industry-Based Model

In this section, we will define the industry-based model and highlight its key features. This will help lay the foundation for a deeper exploration of its meaning and applications.

What is the Industry-Based Model?

The industrial-based model refers to an economic and production system based on large-scale manufacturing, standardized processes, and mechanized production methods. It emerged during the Industrial Revolution and continues to serve as the dominant framework in modern industrialized societies.

Key characteristics of the industrial-based model include

  • Mass production: The industrial-based model emphasizes the production of goods on a large scale, often using assembly lines and specialized machinery to maximize efficiency and output.
  • Standardization: Standardization is a critical aspect of this model, ensuring consistent quality, interchangeability of parts, and efficient production processes.
  • Division of Labor: Division of labor is a hallmark of the industrial model, where tasks are broken down and assigned to specialized workers, optimizing productivity and expertise.
  • Mechanization and Automation: The industrial-based model uses machinery and automation to streamline production processes, reduce manual labor, and increase overall efficiency.

Section 2: Benefits of the Industrial-Based Model

In this section, we will explore the benefits associated with the industrial-based model, highlighting its positive impact on productivity, economic growth, and innovation.

Increased Production Efficiency

The industrial-based model enables higher production rates, allowing companies to meet growing demand and achieve economies of scale. Standardized processes and mechanization contribute to increased efficiency, reducing costs and improving output.

Economies of Scale

Mass production and standardized processes enable economies of scale, resulting in lower production costs per unit. This cost advantage can translate into competitive pricing, broader market reach, and increased profitability for companies.

Technological Progress and Innovation

The industrial model has historically driven technological advancement and innovation. The need for efficiency and productivity has spurred the development of new machines, manufacturing techniques, and production systems, fostering continuous progress in various industries.

Section 3: Applications of the Industry-Based Model

In this section, we will explore practical applications of the industrial-based model in various industries and sectors, demonstrating its versatility and far-reaching impact.

Manufacturing Industries

Manufacturing industries such as automotive, electronics, and consumer products rely heavily on the industrial-based model. It enables efficient production, quality control, and cost-effective manufacturing processes that enable the mass production of goods.

Infrastructure Development

The construction and infrastructure sectors also benefit from the industrial-based model. It facilitates standardized construction methods, streamlined project management, and efficient use of resources, resulting in faster and more cost-effective development.

Supply Chain Management

The industry-based model plays a critical role in supply chain management. By optimizing production processes, it improves coordination, reduces lead times, and ensures timely delivery of goods at various stages of the supply chain.


The industrial model is a cornerstone of modern economies, characterized by large-scale production, standardized processes, and mechanization. Its benefits, including increased production efficiency, economies of scale, and technological advances, have contributed to economic growth and innovation across all industries. By understanding the industrial-based model and its applications, we can appreciate its historical significance and ongoing relevance in shaping the world of business and production.


What is industry-based model?

An industry standard model is a set of “universal” operational process methods or tools that are applicable in most companies within a specific industry. It identifies the core dimensions, materials and methodologies those companies may use and supports business practices.

What is an industrial organization model?

called the I/O Model or Industrial organization model. This model explains it is the external environment which you should take care of before you make your. strategy. This model explains that the industry in which a firm chooses to. compete has a stronger influence on the firm’s performance than do the choices.

What is the resource-based model?

Resource-based theory suggests that resources that are valuable, rare, difficult to imitate, and nonsubstitutable best position a firm for long-term success. These strategic resources can provide the foundation to develop firm capabilities that can lead to superior performance over time.

What is difference between industry organization model and resource-based model?

The industrial organization approach ascribes a firm’s international performance to its external market position. The resource based-view focuses on internal organizational resources such as marketing competency or marketing capabilities to identify the determinants of a firm’s international marketing performance.

What are the 4 types of industry?

industry, group of productive enterprises or organizations that produce or supply goods, services, or sources of income. In economics, industries are generally classified as primary, secondary, tertiary, and quaternary; secondary industries are further classified as heavy and light.

What is IO model in strategic management?

Abstract. The industrial organization (I/O) view of strategy assumes that the external environment determines the actions a firm can deploy.

What is an example of an industrial organization?

Example of Industrial Organization

For example, consider the smartphone industry. Apple Inc. (AAPL)) was the first company to manufacture smartphones in an attractive design and load it with features for the average consumer.

What are the main goals of industrial organization?

A main focus is on competition and monopoly, in their many forms and processes and their effects on efficiency, innovation, and social conditions.

What are the benefits of industrial organization?

The industrial organization model allows firms to get a better gauge on a competitor’s actions with the use of game theory. Game theory, also known as interactive decision theory, consists of a finite amount of players (the competition) and a limited amount of decisions they can make.

What is the difference between industry based and resource-based views?

Firstly, the industry-based view is responsible for examining the environment in the industry. It will focus on the external circumstances in the market, and will see the possibility of gaining a competitive advantage. Secondly, the resource-based view will look at the internal resources.

What are the three main elements of resource-based theory?

Key constructs in the theory are: (1) firm resources and capabilities employed in generating competitive advantage in a potential market, (2) sustainable competitive advantage, (3) market attractiveness (or potential), and (4) financial performance.

What does VRIO stand for?

value, rarity, imitability, and organization

VRIO is an acronym for a four-question framework focusing on value, rarity, imitability, and organization, the criteria used to evaluate an organization’s resources and capabilities.

What are the 5 types of industry?

Industry sectors

  • Primary sector of the economy (the raw materials industry)
  • Secondary sector of the economy (manufacturing and construction)
  • Tertiary sector of the economy (the “service industry”)
  • Quaternary sector of the economy (information services)
  • Quinary sector of the economy (human services)


What are 5 major industries?

Biggest Industries by Revenue in the US in 2022

  • Drug, Cosmetic & Toiletry Wholesaling in the US.
  • Pharmaceuticals Wholesaling.
  • New Car Dealers in the US.
  • Health & Medical Insurance in the US.
  • Hospitals in the US.
  • Life Insurance & Annuities in the US.
  • Commercial Banking in the US.
  • Public Schools in the US.

What are the two types of industry?

Various types of industries are:

  • Primary- Industries which deal with obtaining or offering raw materials which are processed as commodities for the customers. …
  • Secondary- Industries which are essentially manufacturing or assembling industries.

What are the types of industrial organization?

Forms Of Industrial Organizations

There are four basic market structures namely: (1) pure competition, (2) monopoly, (3) oligopoly, and (4) monopolistic.

What is the industrial organization model of above-average returns?

The I/O model suggests that above-average returns are earned when firms are able to effectively study the external environment as the foundation for identifying an attractive industry and implementing the appropriate strategy.

What is industrial and Organisational psychology?

Industrial and organizational (I/O) psychologists focus on the behavior of employees in the workplace. They apply psychological principles and research methods to improve the overall work environment, including performance, communication, professional satisfaction and safety.

What is the meaning of industrial organization view in the process of external assessment?

The Industrial Organization (I/O) View The I/O view of competitive advantage advocates that external (industry) factors are more important than internal factors in a firm achieving competitive advantage. Porter and others contend that organizational performance will be primarily determined by industry forces.

What are the principles of industrial management in an organization?

14 principles as the general principles management

  • Division of work.
  • Authority and Responsibility.
  • Discipline.
  • Unity of command.
  • Unity of direction.
  • Subordination of individual interest to the general interest.
  • Remuneration (payment/compensation) of personnel.
  • Centralization.

What do you mean by industrial management?

Industrial Management deals with industrial design, construction, management, and application of science and engineering principles to improve the entire industrial infrastructure and industrial processes. Industrial Management focuses on the management of industrial processes.