Herfindahl Index

(noun)

A measure of the size of firms in relation to the industry and an indicator of the amount of competition among them.

Related Terms

Examples of Herfindahl Index in the following topics:

  • Calculating Market Share

    • The Herfindahl index is a measure of the size of firms in relation to the industry and an indicator of the amount of competition among them.
    • Decreases in the Herfindahl index indicate a loss of pricing power and an increase in competition, and vice versa.

  • Consumer Income, Purchasing Power, and Confidence

    • A consumer price index (CPI) measures changes in the price level of consumer goods and services purchased by households.
    • A CPI can be used to index (i.e., adjust for the effect of inflation) the real value of wages, salaries, pensions, for regulating prices and for deflating monetary magnitudes to show changes in real values.
    • Consumer confidence is formally measured by the Consumer Confidence Index (CCI), a monthly release designed to assess the overall confidence, relative financial health and spending power of the US average consumer.

  • Characteristics of the Product

    • This can determine where a product may fall on the price index.

  • Influence on the Entire Supply Chain

    • For example, in July 2009, Wal-Mart announced its intentions to create a global sustainability index that would rate products according to the environmental and social impacts of their manufacturing and distribution.
    • The index is intended to create environmental accountability in Wal-Mart's supply chain and to provide motivation and infrastructure for other retail companies to do the same.

  • Digital Marketing Characteristics

    • Major search engines such as Google often index sites based on the quality and relevancy of their content.

  • Settling the List Price

    • Value to the customer should be taken into consideration in addition to pricing objectives, profit maximization, geographic and buying habit considerations, discounting, rate of return, competitive indexing, the image conveyed by the price, customer price sensitivity, any legal restrictions, the category price points, price ceilings and floors and how payment is to be made.

  • Main Social Networks

    • Yelp -is a comprehensive online index of business profiles that are searchable by location, similar to a Yellow Pages or other telephone directory The website is operational in seven different countries, including the United States and Canada.

  • Social Media

    • They are picked up by search engines, are indexed quickly, are interactive, and allow for online dialogue.