...Is Amazon really a monopoly? Yuejiao Jiang Johns Hopkins University Carey Business School Business Writing and Research Pratt Professor Moore Many people think all large companies have monopolistic power on their market. A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity. Monopolies are thus characterized by a lack of economic competition to produce the good or service and a lack of viable substitute goods. The truth is not all companies with huge market share are monopolies, among them is Amazon. Companies like Amazon should not be regulated, but the opposite, should be encouraged due to its impact on the development of the whole industry as a catalytic role. Amazon is not a monopoly because it maintains low prices, benefits customers, and is consumer driven. First, according to Matthews (2014), companies that hold huge market share like Amazon should not be considered illegal because they are not raising prices for consumers. Amazon put customer experiences and low prices first. The price of books on Amazon has stayed stable for many years. People may question that Amazon has been raising prices of some books since last year. But, consumers are the ones make their own judgments towards price. If Amazon happens to raise the price of books, consumers still can purchase cheaper books from somewhere else. On this condition, Amazon is not a monopoly. Price is not the only thing that will be taken into consideration when...
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...Evaluate whether amazon should be regulated due to its monopoly power (12) Amazon should be regulated due to its monopoly power, as the working conditions for its employees are awful. The company treat workers abusively- an example of this being where Amazon hired paramedics to revive workers suffering from heat-related problems rather than buy air conditioners. Due to their dominance in the book market, amazon have become a 21st century monopoly and thus seem to only care about their profits as a posed to the conditions of their workers. The consequence of this is that Amazon may have a negative image in the media and may lose repeat customers due to their unethical ways. Secondly, Amazon should be regulated due to the brutal way that they also deal with suppliers. Amazon have frequent and on-going fights between their publisher ‘Hatchette’ over the pricing of eBooks. With amazon holding 65% of the e-book market, the company tried to level the pricing of e-books across the board- however other companies objected. Amazon also squeezed the publisher by delaying delivery of its books- sometimes by week. This difficult relationship between amazon, its suppliers and competitors means that the company is isolating itself. This could be a negative as suppliers may not be willing to give them their supplies if they become more and more inconvenient. Also, having good relations with other possible competitors could increase profits for the company as they may be able to work together...
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...Exclusive: Amazon seeks leader for patent acquisitions. Reuters. (2012). Retrieved from http://www.reuters.com/article/2012/08/08/us-amazon-patents-idUSBRE8770ZC20120808 ARTICLE SYNOPSIS Amazon is seeking intellectual property experts so Amazon can advance in its patents and copyrights on the digital media against other big retailers. Amazon wants to advance and expand its technology but, Amazon must protect themselves against the competitors. LEGAL ISSUE A patent is an issue in the article. Amazon wants patents for their growing digital media. Amazon has a patent for the Kindle so; Amazon is looking for patents for applications to be used solely on the Kindle alone, just as Apple has applications that work solely on the I Pad devices. Amazon is competing in acquiring patents before other big retailers do. MANAGERIAL PERSPECTIVE Amazon can cause problems against big retailers by causing monopoly. This can bring forth lawsuits from Google, Apple, EBay, and other e-businesses to claim monopoly power Melvin, S. (2011). This problem cannot be avoided, Amazon wants to be in a big online business, the only way monopoly can be avoided is if reaches a percent as low as 50 Melvin, S. (2011). A solution to Amazons problem is that the other competing retailers also go out and acquire patents. As a consumer reading the article, the ethics involved on Amazon is not a positive one. Even though the growth and expansion sounds great, just knowing that if monopoly could...
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...Monopolies have been around in American since it began. Some of the first monopolies are the reason for Americas advancement. But, what is a monopoly? As the book Economics: Private and Public Choice define it as” A market structure characterized by (1) a single seller of a well-defined product for which there are no good substitutes and (2) high barriers to the entry of any other firms into the market for that product”(). Though laws are in place to help big business not control all business but, some companies find ways to get around it. With business leaders like John D. Rockefeller, to Sergey Bring, Larry Page and Jonathan Wall googles founder’s monopolies are still thriving today but, in a different way. Starting back in the late 1800’s...
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...be a monopoly of every industry, trade, marketing, and services. This would in-turn lead to higher prices for the consumer, lower quality products, less innovation, and poor service. As I mentioned in my opening sentence, I will bring up two individual cases that the DOJ (Department of Justice) is pursuing when it comes to Antitrust Laws. I would like to begin by quoting the DOJ’s mission statement. Mission “The mission of the Antitrust Division is to promote economic competition through enforcing and providing guidance on antitrust laws and principles. Antitrust Laws The goal of the antitrust laws is to protect economic freedom and opportunity by promoting free and fair competition in the marketplace. Competition in a free market benefits American consumers through lower prices, better quality and greater choice. Competition provides businesses the opportunity to compete on price and quality, in an open market and on a level playing field, unhampered by anticompetitive restraints. Competition also tests and hardens American companies at home, the better to succeed abroad. Federal antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade, such as price-fixing conspiracies, corporate mergers likely to reduce the competitive vigor of particular markets, and predatory acts designed to achieve or maintain monopoly power...
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...MONOPSONY Prepared By: Nitish Vashist (D14017) XLRI-2014-17 INTRODUCTION The term monopsony first introduced by Joan Robinson in his book in 1933. Monopsony is defined as form of market in which only one buyer will act as interfaces for multiple sellers of a particular product. It also referred as Buyer’s monopoly. There are many examples in history and in the world of monopsony like the Giant wine maker’s Ernest and Julio who were having immense power of buying grapes from growers, that seller had no choice but agree to their terms and conditions. So we can also say buyers have the power to rule the market and manipulate the supply and demand accordingly. OVERVIEW There are many examples of monopsony but here I am going to take important one only. First will try to understand monopsony in the labor market how it works and how it effects the people. For example 1.0: In Jharkhand, coal minining is considered as major source of employment most of the labors from nearby areas and other areas look forward for jobs here. But if they didn’t get job here then they left with few alternatives and so employer took the advantage of this situation and exploit the labor’s by offering lower wages and facilities. So we can say Employer are controlling the labor market accordingly. We can understand this more with the help of below shown graph of monopsony exploitation. Here we can see increase in Marginal Cost of labor higher than average cost if we try to increase the number the labor’s...
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...2013 John Ilokwu Barnes and Noble Market Structure Barnes and Noble (B&N) is the ultimate destination for consumers to expand their knowledge or enjoy a quiet getaway with their favorite author or connect with a new author. “Leonard Riggio, the company's chairman, began his bookselling career while attending New York University in the early 1960s, and specializes in books, magazines, video, DVD, and music. As a publically traded company with almost 700 bookstores in the 50 United States,” (Barnes) the largest retail bookstore in shopping malls, colleges and universities, and major strip centers plus on the web provides a strong market structure for B&N. In economic theory there are “four different markets; perfect competition, monopoly, monopolistic competition, and oligopoly” (Colander, 2010). Without different markets there would not be any structure. Therefore, it is important to understand and determine the different market structure, the effect of externalities on market outcomes, the barriers new firms have when entering the market, the effect of government interventions, taxation, and regulation on economic behavior. Also this paper will identify three competitive strategies to maximize profits in the long run, the efficacy of strategies on the organization of B&N, and the three types of merger; horizontal, vertical, and conglomerate. B&N made a vertical merger when they became part of the Waldenbook stores, but a conglomerate merger transpired when Waldenbook...
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...following paper, I’ll be focusing on Apple’s antitrust investigation. Additionally, we’ll identify some costs associated with the antitrust behavior, and why Apple was investigated? To conclude, we’ll then shift our focus to weighing out whether or not monopolies and oligopolies benefit society, with at least looking at one study where they did benefit. Apple Gets Investigated and Charged Apple, which has an oligopoly market structure because of their number of competitors, pricing similarities and dependencies with other vendors, was hit with a huge fine for antitrust violations (in the 840 million range). Apple was investigated for helping facilitate a price hike in the e-book market space by colluding with major publishers. The U.S. Department of Justice said this conspiracy was designed to undercut online retailer, Amazon.com Inc’s dominance of the fast-growing e-book market (Reuters, 2013). However, what really drew attention was the immediate price increase for books that the specific publishers that had an agreement with Apple implemented (Sagers, 2013). By cutting out Amazon, Apple could have changed their economy of scale since they were positioning themselves as a powerhouse in the E-book space. Other organizations, such as Amazon, would have experienced barriers to entry into the market, especially...
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...Strategy Simulation Individual Assignment Introduction There are four types of market categories used to classify pricing of product that are as follows: monopolistic competition, monopoly, oligopoly and perfect competition. The type of company and the amount of products being produced determines the market structure for any given company. Each market structure is used to help determine the pricing and non-pricing of the products. The economy in the US is very competitive with numerous of buyers and sellers. Monopolistic Competition According to McConnell & Brue (2004), the idea that each market has its own pricing method is known as a monopolistic competition. In this structure is there are several vendors, variety of products and an easily accessible industry. Each company has the ability to determine its own pricing and can make adjustments according to the sales threshold. However, these industries gain a small percentage of the market price and they will adjust their products to meet customer demand in order to remain profitable. The idea is to make the product more attractable than to make a profit. For instance, if Nike creates a fabulous running sneaker then Adidas will try to imitate and create fancier running sneaker to remain competitive and profitable. According to Wikinomics (2010), the industries in this market rely heavily on advertising in order to entice consumer to purchase their products. Another example of a monopolistic industry is the auto industry...
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...Sales Promotion, Netflix advertises online as well as traditional media such as Television and magazines. As the growth of broadband throughout the United States Netflix was able to leverage this new infrastructure and offer instant streaming of movies to its subscribers. With the success of Netflix currently holding an estimated 61% of the online streaming market share other Competitors such as amazon have entered the market to compete. Netflix is able to benefit by creating the online streaming model as they extend a flat fee per month for subscribers to have access to their streaming library. Netflix has applications that allow a lot of networked devices such as smartphones, game consoles and tablets to be able to allow subscribers to access movies anytime they wish all they require is a stable internet connection. As Netflix progresses they have entered the markets been able to gain market share from many companies and become close a monopoly in their offerings of service, over time they have to adapt to competition from other companies such as Red box for DVD rentals and Amazon for their streaming subscription service, currently Netflix holds over 61% of the online streaming market share. 2. During the operation of a business many of the decisions are fixed in the short run because the company cannot quickly increase the amount...
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...Netflix With advancing technologies and the ever-explosive popular movie industries around the world, Netflix has turned itself into a global master of entertainment at the click of a single key on a laptop computer, iPhone, iPad or television. Netflix has mastered the monopoly on bringing the newest, latest movies to you home worldwide making them the front-runner, and most stable on demand movie and TV watching system on the planet. In the middle 1980’s Blockbuster came on to the scene in small stores across America with videos and dreams, starting with the video home system (VHS) and then transitioning to the digital versatile disc (DVD) dominating the video rental business. It brought fantasy and imagination to almost every home in America and in some other countries. “Blockbuster dominated the video rental industry, possessing over 9,000 stores in 2002 (over 5,000 in the United States) and boasting $6.1 billion in sales (Blockbuster Inc., 2005)” (Abraham, 2012 p.1.8). When Netflix and Redbox came into the mix of home viewing entertainment, Blockbuster lost significant revenue with its stability beginning to weaken. In 1997, Netflix started followed by the Redbox, which entered into the competition in 2002. With both of these up and coming viewing franchising gaining popularity among consumers Blockbuster was forced to file for bankruptcy protection on September 23, 2010. Then in April of 2011, satellite television provider Dish Network bought 1,700 stores. Today there...
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...gained the market Share and how can it retain it? – (maintained a monopoly and how can it continue doing so?) * How has Android OS broken the market share of Apple IOS and what should be its marketing strategy moving forward? * Consumer Behaviour (who decides, who buys) * Competitive aspects * Apple - Tightly integrated (SW, HW) – better experience (B2C) * Android – Consumers decide on HW. Android gives only basic SW which can be modified to suit your needs. This is how they entered (B2B) * Cost Benefit - People benefited with Android due to cost of handsets * Cloud – many unknowns as an industry, lawsuits/govt policies. * For Cloud, we need clarity on whether we are focusing on Enterprise Cloud Services or Consumer Cloud Services….Complicated…Framing the Problem statement requires analysis and time. * B2B – Enterprise, Datacenter * Popular among SMEs * Negligible CAPEX and OPEX…. * Startups cannot afford…therefore attractive * Amazon, Google, Microsoft, Rackspace – who provide Managed Services – application hosting, Data hosting – * Pricing * Challenges – Can’t have rivals sharing data in same datacenter… * Startups are in Data Backup areas – Install an App in your desktop and this will take a backup and store in the cloud and this can retrieved from anywhere in the world. * Amazon says they will give X space and a virtual machine and client can...
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... DVDs, toys, jewelry, beauty products and any other name brand product you can name ("Hoovers: A D&B Company"). Becoming on of the worlds largest online retailer, its best selling products are the Kindle, which is exclusively sold through Amazon ("Amazon.com"). Amazon.com is a great role model and sets unprecedented standards for the Internet industry. Using the SWOL analysis I will describe why Amazon.com has a variety of qualities as well as new goals and achievements that have been done. First beginning with strengths of the business Amazon.com, one of my personal favorites is the ease. I can order anything on my computer with a click of my finger, without having to bother with long lines or inconveniences in the stores. Shipping is fast and efficient also saving the consumer gas and time wasted had they have driven to the store. In addition, anything over $25 has a shipping cost of $0 ("Amazon"). Who can beat that, and most items that you buy will easily be over the $25 limit. Another benefit is you can search Amazon.com for practically any product with competitive prices and shipping companies thus giving the buyer many options for where they would like for their money to go. The biggest and most profitable strength is the Amazon Kindle, an electronic book reader now integrated with Internet and games. Book purchases and other online apps can be purchased through the...
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...Amazon versus Ebay Amazon versus Ebay Analyze each company’s history, product / services, major customers, major suppliers, and leadership and provide a synopsis of each company. Seattle based Amazon.com was founded in July, 1994, but it was introduced to the world in June, 1995 by its CEO Jeff Bezos. Bezos who was a hedge fund manager in New York left to head west after coming across a finding that the usage of the internet is growing 2300 percent a month. He came up with a plan to get his own retail business online, and headed to Seattle to begin his dream. He started with only 3 employees working out of a garage. Jeff Bezos was able to get Kleiner Perkins Caulfied & Byers to fund Amazon. Some of Amazon.com products include a variety from books, to CDs, videos, and video games. Amazon product line also includes groceries, supplies for pets, greeting cards, and has auctions. A major supplier for Amazon is Ingram, a book distributor, who is still the provider for 60 percent of the books. Amazon is also allied with sites such as Yahoo, Excite, GeoCities, and Netscape. Amazon.com also has links that can be used for household purchases such as groceries and prescriptions. Bezos leadership is demonstrated by observing his comfortableness when he is around the people he addresses on a regular basis from customers, to investors, and the employees. Other leadership qualities of Bezos include his understanding of e-commerce, being focused, having an entrepreneurial team to back...
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...eCommerce Case Studies Case Study 1: Amazon Amazon, originally called Cadabra, was launched by Jeff Bezos in 1995. It was set up during the dotcom boom of the 1990s with an unusual business model - it did not expect to make a profit until after at least four years of business. While other dotcom businesses grew rapidly, Amazon slowly built strong foundations. Finally, at the end of its fourth year, it made a $2.5 million profit. In 2005, it made a profit of $359 million and in 2006, $190 million. Amazon's most famous for selling books, but the company also sells a wide range of products from CDs to small kitchen appliances such as coffee machines. Sales in books from traditional stores have reduced recently and Amazon has often been blamed for `stealing' their sales. Amazon provides an enhanced experience for its customers. For example, when a customer logs in they see a personalised page with suggestions of products they might like. Amazon does not just provide the products, but includes customer reviews, detailed product descriptions and other information to help customers to select the right product for them. There are facilities to create a wish list and a wedding list: customers create a list of products that they would like and pass this on to family and friends to let them know what to buy for a wedding gift or other occasion such as a birthday. For more information, visit the Amazon site, especially the About Amazon and Help sections. A link to this website...
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