Canadian Gold Industry

Economic Characteristics of the Industry

Because of the nature of gold, the "gold industry" is an international market. Since gold is traded on international exchanges, the price of gold in Tokyo has a direct effect on how much gold is extracted in South Afria, or any other gold producing countries. Mining as an industry is heavily capital intensive, and few companies specialize in only one metal. Companies which extract gold are also likely to extract other types of metal (such as copper), and strategic alliances among many different companies can be formed across international borders. There is thus no "Canadian gold industry" in the same sense that there is an "American automobile industr

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n developed by Porter, industries face different pressures due to their unique attributes. Because of this, the competition in a given industry is a result of five competitive forces. Even though the Canadian gold mining industry is, in fact, a global industry, Porter's five forces can be applied to the industry. In fact, the fact that the Canadian industry is global needs to be considered as part of the five forces. Rivalry Among Competitive Sellers There is considerable rivalry among competitive sellers in the gold industry, but the rivalry at this level does not concern price or quality so much as mere availability. When working with gold ore (unlike at the retail level), price is set by the market. Consumers may not purchase gold directly from the company, but rather from a broker. Commodity goods, including gold, are by definition differentiated only by price, and that price is generally market-set. At the current time, companies which have extraction costs higher than $300 per ounce will find their profit margins seriously compressed, yet there is little these companies can do to change the situation from a price standpoint. Offering their gold for more than what is otherwise available on the market means that they
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Some common words found in the essay are:
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Approximate Word count = 2536
Approximate Pages = 10 (250 words per page)

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