...Monopolistic Competition in the Retail Industry The retail industry is a prime example of the modern version of Chamberlin and Robinson’s model of Monopolistic Competition (Grewal, 441). The retail industry consists of vast markets with different brands and goods of one common goal, to sell their products. To cater to this rapidly changing market many large scale retailers are findings ways to make their product more appealing to the public in hopes of gaining market share over their competition. As prices rise, customers are forced to buy substitutes of well-known brand names or alter their preferences. This results in the phenomenon known as monopolistic competition. Monopolistic competition is defined as the result of many firms competing for the same customers in a particular market differentiating their products. If a firm in a purely competitive market can differentiate its product or service, it becomes a part of the monopolistic competition market. Monopolistically, markets are dominated by the following trends: the demand curve is down-ward sloping, no major barriers to entry or exit, profit maximizers, make up the large majority of advertisers, specialize in product differentiation, and each company is free to set their own price and level of output. Due to the retail industry having a large number of firms and competition, there are three major implications of the retail industry that dictate whether a product or brand will succeed. The first implication is how...
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...New York Apartment Price Controls – An Article Review Rent controls began in New York City in November 1943, when rent for all units in the city were frozen at their March 1943 levels as part of the U.S. Emergency Price Act of 1942 (Gyourko & Linneman, 1990). The price controls were altered by Federal Housing and Rent act of 1947, exempting units built after February 1947 from all future controls; New York City continued to price control rent on virtually all apartments constructed prior to 1947 (Gyourko & Linneman, 1990). Only about 1.8% of New Yorkers actually enjoy the securities of rent controlled apartments, 45.4% do live in rent stabilized accommodations where landlords are prohibited from increasing rates by a certain percentage each year (Pittman, 2013). The debate over rent control has been a long controversy; many argue that rent control is far too restrictive and that it makes apartment hunting almost impossible for many (due to the low supply in “affordable apartments”). The price ceilings set in place have been beneficial in terms of making living more affordable, but it also has created other problems. Tenants under controlled rent often stay longer, even it is deemed to be unsuitable for their living situations (ex: expansion in family) simply because it is affordable. Because tenants stay longer, it makes vacancy at certain controlled prices much harder for those who are living in unregulated accommodations (Pittman, 2013). As displayed...
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...Consider Singapore retail firms (retailers) and discuss if oligopoly or monopolistic competition best explains these retailers’ market behaviour. Does oligopoly or monopolistic competition better explain the market behaviour of Singapore retail firms? First, a few definitions are in order. First, retailers are firms that do not produce their goods that are sold, but only sell goods which are in turn manufactured by manufacturers or producers. Second, oligopoly is characterised by many buyers but few sellers, each of the sellers interacting strategically against their rivals, which are the other firms competing in the oligopolistic industry, and there are high barriers to entry, usually caused by high economies of scale. Third, monopolistic competition is a market structure where there are many buyers and sellers, few barriers to entry, and differentiated products that are quite different from other competitors, but psychologically or physically different. For example, NTUC and Giant hypermarket are examples of oligopoly while clothing retail shops such as Charles and Keith are examples of monopolistic competition. First, monopolistic competitive firms can make independent decisions on pricing and output, whereas oligopolies are mutually interdependent because they are rivals rather than competitors. There is price stickiness in oligopoly, shown by the oligopoly kinked demand curve model, which shows there is no incentive for firms to raise or lower prices as long...
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...Special. November 2013. Pp. 1-11 A Comparative Study of Organized and Unorganized Retail Sectors in Bangalore Mihir Dash* & Sam Chandy** Abstract This study analyzes the challenges and opportunities faced by organized and unorganized retail players in Bangalore. It was found that organized retailers see competition from the unorganized sector as their biggest challenge, followed by competition between organized retailers and the inefficiency of distribution channels, internal logistical problem and retail shrinkage, while unorganized retailers see organized retailing as their major challenge, followed by cost of operation, logistical problems, competition between other kirana retailers and inefficient distribution channels. It was also found that organized retailers see Bangalore‟s growing middle class as their greatest opportunity followed by large number of earning youth customers, Bangalore having people from all over India, proportionate increase in spending with earnings and India‟s booming economy, while the kirana retailers see Bangalore having people from all over India as their biggest opportunity, followed by Bangalore‟s growing middle class, India‟s booming economy, large number of educational institutions in Bangalore and proportionate increase in spending with earnings. Thus, the study found that the major challenges as well as opportunities of organized and unorganized retail are almost the same. This means that mitigating the challenges and leveraging on the...
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...the retail banking industry and the banking industry as a whole involves taking risks mainly when offering credit facilities to borrowers. It is for this reason that the risk taking behavior of a bank will always have an impact on the bank’s profitability and ultimately on whether or not the bank remains a going concern. This is despite that in a number of countries the non-interest income on banks is growing in importance; after-all loans constitute the largest share of bank’s assets. Over the years there has been a significant amount of research on the effects of competition on the risk taking behavior of banks and hence their stability. This has been coupled with inquiries by different competition authorities around...
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...manufacturers’ brands due to these interactions with the customers. Paradigm shift in the approach This factor along with the increasing competition has forced many big companies to explore the opportunities and offer the products and services directly to the consumers by controlling their distribution system. Retailers have always focused more on the operational concerns and giving higher priority on buying decisions when they have had an opportunity to be market oriented. In the past, mass retailing have been apathetic to capitalize this advantage leaving an open field to the manufacturers. However, the changing marketing conditions and the increasing power of retailers over manufacturers in the value chain has brought about a big change in the attitude towards strategic planning. Retailers having widespread availability of information are now looking to establish their leadership and credibility in the marketing channels. This change in retailing can be considered as a paradigm shift from merchandising to marketing. This evolution has forced retailers to establish their store names as brands and the focus is more on building brand awareness and set up a differentiated brand image. Retail branding is nothing but a strategy to use the ‘brand concept’ and pass it on to a retail company.Retail branding is also important because in any retail store the entire organization is...
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...Described with less than 60% accuracy and thoroughness. Described partially Nordstrom's level of service on the continuum from full service to self-service; gave a relevant example of a store that would be on the opposite end of the continuum and partially explained their differences; omitted key information. Described with 60 – 79% accuracy and thoroughness. Described sufficiently Nordstrom's level of service on the continuum from full service to self-service; gave a relevant example of a store that would be on the opposite end of the continuum and sufficiently explained their differences. Described with 80 – 89% accuracy and thoroughness. Described fully Nordstrom's level of service on the continuum from full service to self-service; gave a relevant example of a store that would be on the opposite end of the continuum and fully explained their differences. Described with 90 – 100% accuracy and thoroughness. 3. Analyze the six components of Nordstrom's retailing mix to determine which have been the most important to the company's success. Provide a detailed rationale. Did not complete the assignment or did not analyze the six components of Nordstrom's retailing mix to determine which have been the most important to the company's success; did not or did not sufficiently provide a detailed rationale; omitted key information and/or irrelevant information. Analyzed with less than 60% accuracy and thoroughness. Analyzed partially the six components of Nordstrom's retailing mix to...
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...MNC's Effect on Local Businesses in Retailing Sector (India) Contents Abstract 1 Introduction 2 Literature Review 2 Effect of MNC’s into Indian Retail Market 5 Advantages 5 Disadvantages 7 Hypothesis 8 Conceptual Model 8 Conclusion 10 References 10 Abstract Globalization paved the way for entrepreneurs to expand their wings beyond their respective counties. MNCs exploit the business opportunities in other countries based on the FDI policies in those countries. This has both advantages and disadvantages to the target country. The MNCs have their impact on the economy and people of countries in which they operate business. This paper focuses on the impact of MNCs on local businesses in retail sector in India. The report review existing literature which provides insights into FDI policies in India, the level of FDI allowed by Indian government with respect to single –brand and multi-brand foreign companies, the advantages, opportunities, risks, threats and disadvantages of allowing MNCs into retailing sector in India. Introduction Retailing is the business taking up by individuals or families in India. Generally mom and pop kind of businesses operate in retail sector. The retail sector has tremendous growth in India. Moreover retailing is a profitable business in India. Since India is the country with huge population, naturally it is the correct destination to foreign investors to get profits from the market. India has been traditionally depending...
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...Analysis of the grocery industry Coles Supermarkets Australia October 2012 Analysis of the grocery industry Contents Glossary ..................................................................................................................................... i Executive Summary.................................................................................................................. iii 1 Introduction .................................................................................................................... 1 1.1 1.2 Project approach and objectives........................................................................................ 1 Report structure ............................................................................................................... 2 2 3 Coles – an overview ........................................................................................................ 3 Economic contribution of Coles ....................................................................................... 5 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Modelling approach .......................................................................................................... 5 Direct economic contribution ............................................................................................ 6 Indirect economic contribution ......................................................................................... 6 Total economic contribution .......
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...Sultan and Yang Di-Pertuan of Brunei Darussalam and Shell Overseas Holding Limited. BSM operates at Bandar Seri Begawan, Mura Depot and Brunei International Airport Depot with over 70 employees. BSM is the downstream line of the oil and gas industry in Brunei Darussalam. This means that BSM is responsible for marketing and distributing Shell fuels and other products such as lubricants, Jet fuels and Bitumen. Retail Stations BSM is the sole distributor of fuels in the country with 38 retail stations across the 4 district in the country. Currently, of the 38 stations in the country two of which is Company Owned and Company Operated (COCO) and the remainder are Dealer Owned Dealer Operated (DODO). However, BSM faces competition on their other products such as lubricants and Bitumen. Current state Currently, only the two COCO stations are up to par with Shell Global Standards while most DODO dealers are still not taking steps to improve the current situation of the retail stations. Shell Global Standards of the retail station consists of the signage of the entire retail station, the proper layout and display at the other non-fuel profit centers. Roxanna Filling and Service Station and Bunut Filling station are the two COCO stations which are the role models for the non-fuel profit...
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...Multi Brand Retail 1. Overview of the industry: Retailing in India is one of the pillars of its economy and accounts for 14 to 15 percent of its GDP. The Indian retail market is estimated to be US$ 500 billion and one of the top five retail markets in the world by economic value. Comprising of organized and unorganized sectors, Indian retail industry is one of the fastest growing industries in India. The organised retail trade accounts for merely 8-10% of the total retail. According to the 10th Annual Global Retail Development Index (GRDI) of A.T. Kearney, India is having a very strong growth fundamental base. India's retail market is expected to grow at 7% over the next 10 years, reaching a size of US$ 850 billion by 2020. Traditional retail is expected to grow at 5% and reach a size of US$ 650 billion (76%), while organized retail is expected to grow at 25% and reach a size of US$ 200 billion by 2020. The Government of India had been considering opening up the Multi Brand Retail Trade (MBRT) sector to FDI for some time. They had released a discussion paper in 2010 on the topic and had extensively gathered public, academic and industry views on the issue. In November 2011, the Government came out with its proposal for the new FDI policy. However, unable to achieve political consensus on the issue, they had to shelve their plans for the enactment of the policy. Finally the Government decided to pass the new FDI policy on MBRT in September 2012. 2. Growth over last few...
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...widely known as one of the major gasoline retailer agents, its forays into the retail food system cannot go unnoticed. The company has established major outlets throughout the United States providing competition to the traditionally established retail outlets. A major point of departure is the kind of food offered by this retail store. Selling of freshly cooked food is rarely done in the United States especially among the many stops- over retail centers. Apart from the sale of food and gasoline, the company has invested a lot in branding and quality customer service. This has increased the customer base of the enterprise. The latest entry being in North Carolina. The retail food outlets use the established brand to attract more consumers. The retail outlets face stiff competition from major supermarkets and established food outlets. However, the strategy in place sees off the competition. Instead of developing many retail units across the country, Quick Trip resorted to establishing retail outlets in densely populated areas across major roads visited by numerous travelers. The outlets were established in major towns and cities providing a huge customer base. Moreover, the prices of the products in the outlets are lower compared to other stores making it a suitable outlet for buying goods. These are just some of the main reason most people prefer Quick Trip as compared to the other major retail stores Service Concept. Quick Trip has invested a lot of capital on service delivery...
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...Vol. 3, Issue 1, January 2014 FAST MOVING CONSUMER GOODS RETAIL MARKET, GROWTH PROSPECT, MARKET OVERVIEW AND FOOD INFLATION IN INDIAN MARKET – AN OVERVIEW RALLABANDI SRINIVASU Professor & Director –Operations, St. Mary’s Group of Institutions, Hyderabad, India. Abstract:The fast-moving consumer goods (FMCG) sector is an important contributor to India’s GDP. Fast moving consumer goods (FMCGs) constitute a large part of consumers’ budget in all countries. This study is aimed at to shed light on competitive conditions prevailing in the FMCGs retail trade sector. This study also focused on the analysis of competitive within the sector, and draws lessons for competition policy. FMCG Industry is characterized by a well established distribution network, low penetration levels, low operating cost, lower per capita consumption and intense competition between the organized and unorganized segments. India’s FMCG sector creates employment for more than three million people in downstream activities. It is currently growing at double-digit rate and is expected to maintain a high growth rate. Indian buyers were a bit conservative partly due to lesser disposable income and partly due to fewer competitive and more variety of products. Food inflation could restrict consumers’ demand and pricing flexibility for FMCG while lowering consumers’ purchasing power that diverts purchases away from certain FMCG. Keywords: FMCG, Indian FMCG Retail Market, FMCG Growth Prospect, FMCG Market overview, FMCG...
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...External Case Report The Warehouse is one of New Zealand’s largest retail stores. It is owned by The Warehouse Ltd and Stationary Warehouse is also part of this brand. These two stores are part of the retail industry. External factors are constantly changing the environment and industries that businesses operate in today. Analysing these factors is the best way to determine which aspects have the largest effect on the industry and the business. The retail industry in New Zealand is by no means small. This means that The Warehouse Ltd is constantly under threat from numerous competitors. Stores such as Farmers, Briscoes, Rebel Sports and Dicksmith all sell similar or the same products as The Warehouse Ltd products. In 2011 the total expenditure for the retail industry in New Zealand was $65,901,115 (Retail Research and Statistics, 2009-2011). This is a very high amount of expenditure which means rivals have plenty of opportunities to gain their share within the retail industry in New Zealand. The Five Forces Analysis is the best way to understand the key dynamics, drivers and forces which control the retail industry. The threat of new entrants to the retail industry is an important aspect. The Five Forces Model states that new entrants can pose to the industry consist of (Hanson, Ireland, Hoskisson, & Ireland, 2011): * Product differentiation * Economies of scale * Capital requirements * Switching costs * Access to distribution channels * Cost disadvantages...
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...form of competition. Responding to outsourcing calls for policies that enhance national competitiveness and establish rules ensuring acceptable forms of competition. Viewing outsourcing through the lens of competition connects with early 20th century American institutional economics. The policy challenge is to construct institutions that ensure stable, robust flows of demand and income, thereby addressing the Keynesian problem while preserving incentives for economic action. This was the approach embedded in the New Deal, which successfully addressed the problems of the Depression era. Global outsourcing poses the challenge anew and calls for creative institutional arrangements to shape the nature of competition. Thomas Palley Economics for Democratic and Open Societies Project Washington DC 20010 e-mail: mail@thomaspalley.com March 2006 1 “A wild horse can do a lot of damage, but a bridled horse can be an invaluable asset.” Posted by Proud UAW Member in response to “Politics of Globalization” at www.thomaspalley.com, December 27, 2005. I. Understanding outsourcing Outsourcing is a central element of globalization, and policymakers need to understand its economic basis if they are to develop effective policy responses. The practice of outsourcing should be understood as a new form of competition, and responding to it calls for the development of policies that enhance national competitiveness and establish new rules governing the nature of global competition. Viewing...
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