I/O Model Definition

• I/O model stands for

  Industrial Organization Model
• The industrial organization (I/O) model of above-average returns explains the external environment’s dominant influence on a firm’s strategic actions.
• The model specifies that the industry or segment of an industry in which a company chooses to compete has a stronger influence on performance than do the choices managers make inside their organizations.
• The firm’s performance is believed to be determined primarily by a range of industry properties, including economies of scale, barriers to market entry, diversification, product differentiation, the degree of concentration of firms in the industry, and market frictions.