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 a producer has a little impact on the price of its product it creates a limited profit potential. As a result, a company needs to act the way market dictates. On the other hand, too much market power brings other problems along, as the Apple Inc. found to its dismay. Apple Inc. is a company with the largest market power and is therefore called a near-monopoly in the oligopolistic industry it operates in. Even though Apple Inc. operates in the oligopolistic market, since it is not the only provider in the smartphone/tablet market, or in the operating systems market, it takes a dominant market share.
Costly to Imitate? Organized? Yes Yes Yes Yes Result: Sustainable Competitive Advantage It is valuable because competitor’s target is different from Lemon Square’s Power Pops. It is rare because competitors have a pricing that exceeds P10. It is imperfectly imitable since most of the competitors are international brands therefore price cannot just be lowered to compete with Rice Pops.
Producing soft drinks for a wide market would require a significant investment in production equipment, brand material, and advertising. The high cost of operating in this industry prevents many companies from entering the competitive arena. Last, these two companies engage in non-price product differentiation. Rarely will you see Pepsi attempt to undercut Coca-Cola in price. Instead, you see these companies use creative advertisements to compete (Neary
A lot of manufacturers and suppliers in these countries did not have the developed technologies to produce sustainable “green” raw materials, and therefore, products that are standardized in IKEA. To invest in the development of an environmental-friendly sphere in those countries would result in an increase of price for the goods, which would not be tolerated by indian and chinese people. Furthermore, the concept of DIY, for which they are mostly famous, is not at all common (even hated) in asian culture, due to low labour costs. IKEA made a mistake, by failing to ascertain the differences in cultures promptly. As a result, they have increased the number of assembly services for customers to visit.
Usually, what happen is that product formed by the monopoly is not formed by any other company and hence the customer has to decide between quality and pricing. Also, the reduced completion results in bad quality and outdated products. 10. Perfect Competition Perfect competition, an economic ideal, is a condition which prevails in a market in which customers and sellers are too large in number and better informed that all essentials of monopoly can get absent and the market price of a product is away from the control of individual consumers and sellers. In economics, the perfect market is the one in which several conditions collectively make a perfect
1. Coca Cola Threat of New Entrants/Potential Competitors: Entry barriers are low for the drink indusry: Plus: There is no need to start-up Money. Minus, Too many new competitives are entering to the market with similar costs. Plus,Consumers see coca cola not only as a drink but also a high impact brand and faithful customers are not satisfied to try a new brand. In this way Coca Cola eliminates threats of new entrants.
POLITICAL Tax policy, trade control, import restrictions, employment, and GOVT. policies are effect business directly or indirectly. Without politics stability market cannot grow. If we talk about US political relation it should be in favor because part of the overall sales of Apple Company reported from rather than US. APPLE manufacture their some part out of US if their political relation are not good then company cannot grow.
They can do this because they are few in numbers and not necessarily acting in collusion. They offer similar products, differentiated by advertising and promotional expenditure, and can foresee the effect of one another's marketing strategies . Examples of Oligopolies are Smart and Belize Telemedia and Auto Manufacturers. • Monopoly – This is a market situation where one producer controls supply of a good or service, and where the entry of new producers is prevented or highly restricted. These type of firms keep prices high and restrict the output, and show little or no responsiveness to the needs of their customers .
Verma and Elman (2007) understand that not all governments and companies desire strict labor standards as they can be hindrances to competitiveness. If the labor standards are too extensive, strict, and expensive, buying companies will go somewhere else and the industry in that country will decline. Nonetheless, Verma and Elman (2007) argued that labor standards are beneficial to all because they can boost standards of living and national economic growth (p. 57). To support the design of effective labor standards, they examined the pros and cons of hard and soft models where hard models are legislation-based and soft counterparts are largely voluntary and pressure-based. Findings showed that consensus is vital to the creation of legitimate labor standards (Verma & Elman, 2007).