INDUSTRY STRUCTURE AND INCOME OPPORTUNITIES 155
competitors can choose how to compete: breweries can focus on costs (econ-
omies of scale) or price (premium beers), and many try to do both.
Not all businesses offer scope for competitive advantage. Once a companyproviding a guard service to commercial buildings has employed someone at
the lowest possible wage and persuaded them to turn up on site, its economics
are likely to be exactly the same as its competitors’. Some airlines seek pre-
mium prices, whilst others offer a low cost option, and all try to maximise
asset utilisation (‘load factor’), but it is hard to build a sustainable advantage on
any dimension, which is why airlines seldom earn good returns and often fail.
In a society with little use of machinery such as Athens, most firms willhave similar input costs and similar labour productivity. This fact rules out
operating costs as a source of advantage. Few industries required much capital.
Assets consisted largely of slaves, and only where inventory was very expen-
sive – perfumes,^35 jewellery^36 and luxury furniture (Dem. 27.9) are prime
examples – would non-slave assets be an important component of a firm’s
balance sheet. Equipment investment was trivial: a pottery workshop required
only clay and slave labour to build and rebuild a furnace. A metal workshop
would only have to add an anvil, hammer and tongs, all probably available
second-hand. Even large businesses were valued at sums that would have been
within the reach of several hundred citizens: a twenty-slave furniture business
was pledged as security for a loan of 4,000 drachmas (Dem. 27.9) and a small
foundry cost 1,700.^37 Epicrates’ perfume business went for 4,000 drachmas and
was apparently worth much less (Hyp. 3.8). Several horoi record loans made on
the security of workshops or shops.^38 The largest loans are for 6,000 drachmas;
several others are for smaller amounts, ranging from 500 drachmas to 1,750
drachmas.^39 Because the value of the security was usually twice the value of
the loan, the most expensive workshop in the horoi would be valued at about
Return on
InvestmentAssets Asset
Utilisation÷CostsRevenuePriceMargin -