Since both the company’s market share so large, the market is very close to a duopoly (other players having a very small impact on the market). Hence we assume this to be a situation of duopoly. The 2 companies sell products which are very close substitutes and are constantly fighting for greater market share. A person may buy a Coke product instead of a Pepsi one, and vice versa. The objective of both is to maximize their profit.
When there is a large number of sellers and a large number of buyers in a market, that market is regarded as a perfectly competitive market or industry. In a perfectly competitive market, a single firm cannot dictate the pace and the selling price (Khan Academy, n.d.). In other words, one firm cannot set the prices and the competitors are obligated to market prices. What is fascinating about a perfectly competitive industry is that the barriers that prevent new firms from entering the industry are flexible; that means there are minor barriers of entry as well as little or no barriers to exit the industry (Rittenberg & Tregarthen, 2009). Additionally, buyers and sellers have all the necessary information to make a decision to buy or sell a product.
In Daniel Engber’s piece called “Let Them Drink Water!”, he talks about how taxing directly in a per pound overweight fashion isn’t really ideal. People aren’t really going to be too thrilled with paying an extortion fee to the government based on their bodily weight. But the current method of indirect taxing through soda taxes isn’t influencing people to lose weight. “The state-level penalties now in place have turned out to be way too small to make anyone lose weight, and efforts to pass more heavy-handed laws
Without competition, companies would not have the need to adjust their prices, or improve their products to win over customers, resulting in low quality goods & services with high prices. Competition generally has a positive impact on the consumers, as when companies begin to strive to be the best and most successful in their industry, they utilise marketing strategies to win over customers, these include but are not limited to price, product, promotion and place. Two companies which are continually constructing innovative ideas to come out on top are PepsiCo and Coca-Cola. These two companies hold the majority of the market power in the non-alcoholic beverage industry. They are classified as an oligopoly concentration as the two firms control the vast majority of the market share and therefore requires the two companies to compete on prices as well as non-price related aspects.
a. In a highly competitive firm, many buyers and many sellers allow “buyers to expect to find consistently low prices and a wide availability of the good that they want.” Many buyers and many sellers also allows it to where no single firm can influence the market price. Many buyers and many sellers are important because it creates a highly completive market where the price and quantity sold are determined by the conditions of the market rather than by just one firm. b. In a highly competitive firm, similar products allow buyers to find consistently low prices and a wide availability of the good that they want.
Sustainable competitive advantages: It is not very challenging to have a competitive advantage. However, to have a sustainable competitive advantage requires more attributes of the products or to the store’s marketing strategy. Target Corporation has some sustainable competitive advantages that it uses for maintaining its position as the second largest discount store in the United States. One of the Target Corporation’s sustainable competitive advantage is the retail store’s relatively low-priced electronic products as compared to that of its competitors such as the Apple Inc. In fact, Target Corp. has a net profit margin of 3.70% as compared to the Apple Inc. that has a net profit margin of 19.24% (YCharts, 2016).
The article presents the price of the MagnaSoles at “$19.95 insoles [that] are already proving popular among consumers… [instead of] expensive effective forms of traditional medicine” (52- 55). The price of $19.95 is used to mock the consumer’s thinking that quantity is better than quality. If the MagnaSoles is capable of doing everything it claims to do, then why are companies like Boeing not out of business? The Onion displays ignorance in the consumer 's main attraction towards the price. With the lead in attraction of the low price, the author is able to claim the statement of MagnaSoles being better than “expensive effective forms of traditional medicine” immediately after.
The traditional response models are insufficient to target the highest-spending or most profitable customers. In fact, response models can potentially target the most responsive customers who actually spend the least, especially when promotional offers involve free items or when there is no purchase requirement. To evade the unnecessary marketing costs associated with targeting lower-spending and less profitable customers, statisticians in the financial service industries have enhanced response models by extending the models to predict customer spend as well as customer response. It is important to briefly mention that within retail businesses, this development has been considerably slower to emerge. These models predict combinations of customer response, sales and profit at the individual customer level.
Condiering the comeptetive forces anlaysis ofr all three : • Rivalry in the industry: This is fairly weaker; however Wal-Mart enjoys the topmost slot because of lowest cost, prices and more profits and market share as compared to Amazon and eBay. Because of no entry barriers the market is full of competitors. • Threat of
A market structure will affect the barrier to entry for the companies that intend to join that market. A monopoly markets structure has the biggest level of barriers to entry while the perfectly competitive market has zero percent level of barriers to entry. The other factors that influence the firm behaviour under a market structure are the efficiency. Firm will be more efficient in a competitive market while firms will be least efficient in a monopoly