Industrial Company

We explain what an industrial company is, its characteristics and types. Also, examples of industrial companies from around the world.

industrial company
An industrial company produces value-added goods through labor and technology.

Industrial company meaning

An industrial company refers to a business entity that is involved in the manufacturing, processing, or production of goods or services on a large scale. These companies typically operate in sectors such as automotive, aerospace, construction, energy, and technology, among others. Industrial companies are essential components of the economy, as they contribute significantly to job creation, innovation, and overall economic growth.

One key characteristic of an industrial company is its focus on efficiency and productivity. These companies often utilize specialized machinery, equipment, and technology to streamline their operations and maximize output. Additionally, industrial companies may implement lean manufacturing principles and continuous improvement strategies to enhance their processes and reduce waste.

Another important aspect of an industrial company is its emphasis on quality control and safety standards. Due to the nature of their operations, industrial companies must adhere to strict quality control measures to ensure that their products meet regulatory requirements and customer expectations. Moreover, safety protocols are paramount in industrial settings to protect workers and prevent accidents or incidents.

Furthermore, industrial companies play a crucial role in fostering innovation and technological advancement. Through research and development efforts, these companies strive to introduce new products, processes, and technologies that can enhance efficiency, sustainability, and competitiveness. Industrial companies often collaborate with academic institutions, government agencies, and other industry partners to drive innovation forward.

What are industrial companies

Industrial companies are businesses that are involved in the manufacturing, processing, or production of goods. These companies typically operate large-scale facilities where raw materials are transformed into finished products.

One key characteristic of industrial companies is their focus on efficiency and productivity. They often utilize advanced technology and machinery to streamline their production processes and maximize output.

Industrial companies play a vital role in the economy by creating jobs, driving innovation, and contributing to economic growth. They are essential for supplying goods to various industries and consumers.

Due to the nature of their operations, industrial companies must adhere to strict safety and quality standards to ensure the reliability and integrity of their products. Compliance with regulations is crucial in this sector.

In today’s globalized world, industrial companies face challenges such as competition, market fluctuations, and technological advancements. To stay competitive, they must continuously adapt and innovate their processes.

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What is an industrial company?

An industrial company is a type of for-profit organization whose productive activity focuses on the activities of obtaining, processing and transforming raw materials into goods finished goods (which go directly to the consumer) or intermediate goods (which serve as inputs for other companies in the sector). Industrial companies are part of the secondary sector of the economy, the manufacturing sector.

However, industrial companies are distinguished from other manufacturing companies in that their work involves the deep transformation of the raw material, in highly mechanized and/or automated facilities, in which more or less specialized workers work. The work of the industry is, precisely, to produce through work and technology different goods with added value.

Industrial companies arose with the Industrial Revolution, in Europe in the 18th century, and since then have been a fundamental economic actor in the capitalist world, without which the modern way of life would not have been possible to achieve. The transformation of the peasantry into the working class, the mass production of goods and the construction of a consumer society were only possible thanks to the success of industry.

If you liked it, follow reading: Industrialization

Characteristics of an industrial company

An industrial company is broadly characterized by the following:

  • It is dedicated to the production of finished or semi-finished goods, from raw material extracted from nature (or also processed by other industries). Its production can be on a large scale, or in a minority way.
  • They are for-profit organizations that produce goods with added value, that is, whose commercial value is greater than the total value of its components separately.
  • Since its appearance in the 18th century, industrial companies have been among the top employers of the contemporary world.
  • They are usually located in large spaces that house the machinery and labor necessary to produce. For production, they also require investment capital, raw materials and energy.

Types of industrial companies

industrial company types
Light production companies use little energy and require light machinery.

Industrial companies can be, fundamentally, of two types:

  • Extractive companies. They are companies that are dedicated to obtaining the raw material and its management so that it serves as an input to other secondary companies. These companies normally have a permit or tender from the State (owner of a country’s natural reserves) to exploit the resources available in the soil or subsoil. For example: mining companies that extract lithium, copper and/or precious metals from the subsoil.
  • Manufacturing companies. They are companies that are dedicated to the transformation of raw materials and the production of finished or semi-finished goods. For this they often require raw material extracted by other companies. For example: companies that receive iron sheets from an extractive company and with them produce nails and screws. Some of them will go for direct sale to the public, and some will go to other manufacturing industries that will use them to produce furniture.
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However, manufacturing companies can be, in turn, of two types:

  • Light production companies. They are companies that produce consumer goods or intermediate goods that are not very elaborate. For this they use little energy and require light machinery. For example: an agricultural company that harvests barley.
  • Heavy production companies. They are companies that produce capital goods (equipment and machinery) or complex goods. For this they use a lot of energy and heavy machinery. For example: an auto parts factory.

Examples of industrial companies

Some examples of industrial companies are:

  • Nokia. Multinational company of Finnish origin dedicated to the field of technology and telecommunications, that is, to manufacture electronic devices.
  • PDVSA. Venezuelan state company dedicated to the field of oil extraction and crude oil refining to obtain important derivatives.
  • General Motors. American company created in 1908, dedicated to the manufacture of automobiles and automobile parts.
  • Boeing. Multinational company of American origin dedicated to the production of aircraft (planes), satellites and weapons goods.
  • Arcelormittal. Multinational company considered the largest steel company on the planet and leader in steel production.
  • International Business Machines Corporation (IBM). Multinational company of American origin dedicated to the manufacture of electronic and computerized equipment.
  • IKEA. Multinational company based in the Netherlands, dedicated to the manufacture and sale of furniture, mattresses and other supplies for the home.
  • Tramontina. Internationally renowned Brazilian company, dedicated to the field of supplies for the kitchen and dining room.
  • LEGO. Danish children’s toy company, famous for its plastic building blocks.
  • Bayern. Chemical-pharmaceutical company of German origin, pioneer in the world of aspirin, recognized for the quality of its vaccines and medicines.
  • Huawei. Multinational company of Chinese origin, dedicated to the field of technology and telecommunications, especially the manufacture of smartphones.
  • Ford Motor Company. American company specializing in the production of automotive goods, whose name is due to its founder, the legendary Henry Ford.
  • Penguin Random House. Multinational company dedicated to the publishing sector, that is, to the printing of books, arising from the merger of Penguin Books and Random House.
  • ExxonMobil Corporation. American oil company founded in 1870 under the name of Standard Oil Company.
  • Procter & Gamble (P&G). Multinational company of American origin, dedicated to the production of personal hygiene consumer goods.
  • Heyi Wood Industry Co.. Chinese timber company, which produces intermediate goods for construction and furniture manufacturing.
  • Compagnie Generale des Établissements Michelin. French company dedicated to the manufacture and sale of tires for automobiles and motorcycles.
  • Volkswagen. Multinational company of German origin, dedicated to the manufacture of automobiles and spare parts.
  • Panasonic. Multinational company of Japanese origin founded in 1918, which is among the main manufacturers of the technology and electronics sector in the world.
  • SanCor. Argentine company dedicated to the production and marketing of milk and dairy products.
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Industrial plant benefits

industrial company plant location
Industrial plants are usually located on the outskirts of cities.

The specialized locations for the industry are called industrial plant, that is, to locations dedicated to industrial work. Industrial plants are frequently located on the outskirts of cities, so that they do not negatively affect the quality of life of the residents. Among the virtues of this type of location are:

  • They have the infrastructure suitable for productive work.
  • Count on basic services (such as electricity, gas and water) exclusively dedicated to industry.
  • Provide greater industrial, physical and legal security to investors.
  • They allow the organization of productive work in suitable spaces, which has repercussions on a better work environment.
  • Toast lower operating costs by centralizing everything in the same space.
  • They often have tax breaks.

Difference Between Company and Industry

The terms “company” and “industry” usually go hand in hand today, but that does not mean that they are synonymous or interchangeable. A company is a human organization with productive and profit purposes.that is, a legal form of organization of people that allows them to invest money in the development of a profitable activity.

Companies can be of many different types -industrial, for example-, depending on the type of activity they carry out. For example, an importing company is one that buys goods abroad and then sells them within its country.

Instead, “Industry” is a much more specific term, which has to do with the transformation of matter into consumer goods, using for it work, machinery and energy. It is a modern economic activity, typical of the world of capitalism, whose appearance transformed humanity forever.

In fact, we associate this work with companies because the industry emerged, precisely, in the private sector of 17th-century Europe, more specifically in the large textile factories of England. However, as has been seen recently, not all companies are dedicated to industry, but within the capitalist production model, all industries necessarily make up a company, whether public or private, dedicated to the industrial exploitation of a specific item. .

Continue with: Light industry

References

  • “Industry” on Wikipedia.
  • “What is an industrial company?” in Gedesco.
  • “Industrial companies, general concepts and types to highlight” at OBS Business School.