...Differentiating Between Market Structures Differentiating Between Market Structures The “Differentiating between Market Structures Simulation” applied all four of the market structures to four major divisions of a fictitious transportation company called as East-West Transportation. The four divisions for the various products they transport are Consumer Goods Division, Coal Division, Chemical Division, and Forest Products Division. This paper will summarize the advantages and limitations of supply and demand, the effectiveness of structure, and will analyze how each market structure maximized their profits. The market structures represented in this paper are Perfect Competition, Monopoly, Oligopoly, and Monopolistic Competition. Perfect Competition According to the simulation the Consumer Goods Division operated in a market that perfectly competitive. There were several buyers and sellers, each of the sellers being a price taker and there were no barriers to entry. The limitations or advantages of the Consumer Goods Division are as follows. The competition is high so the demand for their service will be low. Continuing to supply this service would mean the company would have to spend more on improving the quality of its service so as to maintain and increase the demand. In the simulation, the first decision made was whether to cease operations in the Consumer Goods Division or to continue operations and minimize any losses. Monopoly The second scenario in the simulation...
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...Differentiating Between Market Structures Simulation & Characteristics Table ECO/365 October 2, 2011 Differentiating Between Market Structures Simulation The “Differentiating between Market Structures Simulation” applied all four of the market structures to four major divisions of a fictitious transportation company called as East-West Transportation. The four divisions for the various products they transport are Consumer Goods Division, Coal Division, Chemical Division, and Forest Products Division. This paper will summarize the advantages and limitations of supply and demand, the effectiveness of structure, and will analyze how each market structure maximized their profits. The market structures represented in this paper are Perfect Competition, Monopoly, Oligopoly, and Monopolistic Competition. Perfect Competition According to the simulation the Consumer Goods Division operated in a market that perfectly competitive. There were several buyers and sellers, each of the sellers being a price taker and there were no barriers to entry. The limitations or advantages of the Consumer Goods Division are as follows. The competition is high so the demand for their service will be low. Continuing to supply this service would mean the company would have to spend more on improving the quality of its service so as to maintain and increase the demand. In the simulation, the first decision made was whether to cease operations in the Consumer Goods Division or to continue operations...
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...Differentiating between Market Structures ECO 365 9/8/2014 Differentiating between Market Structures This paper is designed to provide information differentiating between market structures of Pinnacle Family of Companies which is the nation’s largest third party fee manager of multifamily housing. Pinnacle is a full-service real estate management and brokerage firm that is headquartered in Seattle. Pinnacle oversees a portfolio of apartment, office, industrial and retail assets valued at more than $18 billion. The portfolio includes properties in more than 300 cities across the United State, Canada, and Asia. Pinnacle is also a recognized leader in affordable housing management and active in the privatization of military housing. American Management Services LLC was founded by John Goodman in 2003. Goodman Management Group, as it was originally named was formed to restructure Pinnacle’s business to better serve clients. In 1985, Stan Harrelson, became partner of Goodman Management Group and renamed it American Management Services, dba Pinnacle. In response to client demands, the company expanded nationwide in the late 80s. Market structure is defined by the manner in which a market is organized, based largely on the number of firms in the industry. There are several competitive firms in the industry. Of these firms, Pinnacle is the second largest and most powerful company in the industry in sales and service. Four basic structure models are: perfect competition...
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...Differentiating Between Market Structures Daniel St.Germain Eco 365 November 18, 2013 Ed Hartmann Differentiating Between Market Structures ------------------------------------------------- University of Phoenix Material Differentiating Between Market Structures Table * * Compare the four market structures by filling in the table. * | Perfect competition | Monopoly | Monopolistic competition | Oligopoly | * Example organization | Vendor at a swap meet | Google | Fast Food Industry | Automotive Industry | * Goods or services produced by the organization | Many different goods that are indistinguishable from other vendors | Internet search engine | Burgers, fries, onion rings, shakes, sodas, etc. | Vehicles; personal and commercial | * Barriers to entry | Close to none; if you can afford the entry fee you can sell | Impossible to surmount; currently there are three top search engines of which Google has close to a 90% market share | They are low barriers to entry. Any startup capable of getting financed can set up a burger joint on the corner. | The barriers to entry are high due to economies of scale, complex distribution channels, product differentiation, etc. | * Number of organizations | Nearly unlimited, as many as can fit on the grounds | 3 in this case, but one holds the majority of the market hostage, in this case, Google is the one. | There are many competitors in this market. As stated previously if one can get a loan...
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...Differentiating Between Market Structures Mindy Gomes ECO/365 January 19, 2015 John Bayer Differentiating Between Market Structures In the electronic learning toy industry, there are a few companies that stand out as leaders. VTech is one organization in the electronic learning toy industry that stands out above the rest. “VTech is the global leader in electronic learning products from infancy to preschool and the world's largest manufacturer of cordless phones” (VTech Corporate Information, 2015). Market Structures There are four different market structures in microeconomics. These structures are perfect competition, monopoly, monopolistic market, and oligopoly. These market structures vary based on the number of firms in the industry, and barriers to entry. Perfect Competition Perfect competition is often used as a reference point in economics, as it is a theoretical structure due to its highly restrictive assumptions. “A perfectly competitive market is a market in which economic forces operate unimpeded” (Colander, 2013, p. 267). To have a perfect competition these conditions must be met: both buyers and sellers are price takers, a large number of firms, no barriers to entry, and the firms’ products are identical. Monopoly In a monopoly, there is only one firm, with huge barriers to entry. “Monopoly is a market structure in which one firm makes up the entire market” (Colander, 2013, p. 287). There is no competition. A monopoly is at the opposite...
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...Differentiating Between Market Structures in Trader Joe’s ECO/365 Differentiating between Market Structures in Trader Joe’s Trader Joe’s is a grocery store that offers upscale grocery fare such as; organic produce, nutritional supplements, and health foods. Trader Joe’s was founded by Joe Coulombe and started in 1958 as a small chain of convenient stores in Greater Los Angeles Area called Pronto Markets. Since then, Trader Joe’s has expanded and now has around 375 stores in 30 or more states ("Trader Joe's Company Competition", 2012). Trader Joe’s focuses on providing customers with great quality foods that are hard to find, but at a great value that will save customers money. Trader Joe’s has its own specialty line of private label products, their stores are about 12,000 to 15,000 square foot, and have no service departments. This makes it possible for Trader Joe’s to keep costs down. Some of the products sold include, organic foods, unusual frozen foods, gourmet foods, imported foods, vegetarian food, imported and domestic beer and wine. In addition, Trader Joe’s sales non-food items such as; household cleaners, personal hygiene products, pet food, vitamins, and plants. In addition, many of Trader Joe’s products are environmentally friendly ("About Trader Joe's", 2013). Below is an evaluation of Trader Joe’s market structures, competitive strategies, and recommendations. Market Structure Trader Joe’s market may be viewed as a monopolistic...
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...Differentiating Between Market Structures in Kudler Leonard Page ECO/365 April 17, 2014 Mr. William Mason Differentiating Between Market Structures in Kudler Kudler Fine Foods stores in San Diego California are considered upscale Fine Food stores. Kudler Fine Foods operates three local stores, and its vision is to be the only Fine food gourmet grocery store for a specialized group of smart shoppers looking for the best meat, produce, cheeses, and wine. Kudler Foods competes on a different strategy. While the advertising is similar to the average grocery stores in the area, the advertising in not built on “loss leader” criteria. Kudler Foods is one of the only a few competitors in Orange Country that offers a complete gourmet shopping opportunity. The company considered the greatest competition is he Cardiff Seaside Market and is in direct competition to the Encinitas and the Del Mar locations. If left unchecked and depending on how effective the new managers are at strategic combinations, the competing store could negatively affect Kudler Food Market shares. Something like this could destroy Kudler Foods Customer service base. Strengths and weaknesses, customers are happy with the displays and layout of the store, merchandise purchase. The 2011 market survey for Kudler, indicated that the customer shopping atmosphere is the stores biggest strengths with over 80% of those responding agreeing that the “store hours are convenient” and the “atmosphere and décor...
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...Differentiating Between Market Structures ECO/365 September 29, 2015 Differentiating Between Market Structures Verizon Wireless is owned by Verizon Communications Inc. and provides telecommunications services to households and businesses in the United States and voice/data services to more than 200 destinations globally. Verizon Wireless is a leader in the industry, Americas first nationwide 3G wireless broadband network, and the nations largest most reliable 4G LTE network (Verizonwireless.com, 2015). Market Structure of Verizon Wireless Verizon Wireless competes in an oligopoly market structure. The oligopoly market consists of few firms, significant barriers to entry, strategic pricing between monopoly and perfect competition, restricted output and the possibility of long-run economic profit (Colander, 2013). The telecommunication service industry consists of a small number of sellers and has high barriers for new entrants. The four leaders of the industry are Verizon, AT&T, Sprint and T-Mobile, combined these firms dominate the market. One of the most important factors that make up the market structure are the barriers that exist. The barriers in the wireless cellular service market exist primarily due to the high costs associated with the infrastructure required to provide reliable wireless service. Another barrier is the limited amount of spectrum (an essential input required to produce cell phone and...
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...create defendable positions in an industry. • In general, the strategy can be offensive or defensive with respect to competitive forces. • Defensive strategies take the structure of the industry as given, and position the company to match its strengths and weaknesses to it. • In contrast, offensive strategies are designed to do more than simply cope with each of the competitive forces; they are meant to alter the underlying cause of such forces, thereby altering the competitive environment itself. There are, of course, many specific strategies of each type (offensive or defensive), and identifying which is best depends on the circumstances. But Porter suggests 3 broad or generic strategies for creating a defendable position in the long-run and outperforming competitors. 1) Cost Leadership • Cost leadership means having the lowest per-unit (i.e., average) cost in the industry – that is, lowest cost relative to your rivals. • This could mean having the lowest per-unit cost among rivals in highly competitive industries, in which case returns or profits will be low but nonetheless higher than competitors • Or, this could mean having lowest cost among a few rivals where each firm enjoys pricing power and high profits. • Notice that cost leadership is defined independently of market structure. Cost leadership is a defendable strategy because: I. It defends the firm against powerful buyers. Buyers can drive price down only to the level of the next most efficient...
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...Differentiating Between Market Structures Lydia Moore ECO 365 Eugene Gotwalt May 11, 2015 Differentiating Between Market Structures The competitive balance between forms is unique in every industry. A single company, while others, dominates some industries, have thousands of small companies competing for the market share. The composition of competitive forms is known as the market structure. For the purpose of this essay, I will focus on a firm called, Safeway Incorporated. This company works in the grocery industry, which would be an example of monopolistic competition. An analysis of the market structure wil be described and competitive strategies’ will be recommended for the company. Implementing these strategies will help this company in being successful in the market structure. Defining Monopolistic Competition Monopolistic competition occurs when there are many different firms competing for market share of similar products. These are generally low barriers. Which means that it is relatively easy for small companies to become a competitor in the market. All of the companies in this system sell similar products and must make a strong effort towards product differentiation. Products and services are considered to have a high elasticity of demand; meaning consumer has many comparable alternatives to choose from. If a firm decides to raise prices, a consumer in a monopolistic competition market should find it easy to find a similar alternative in their local area...
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...grading elements. Also, at present, WritePoint cannot detect quotations or block-quotes, so comments in those areas should be ignored. Please see the other helpful writing resources in the Tutorials and Guides section of the Center for Writing Excellence. Thank you for using WritePoint. Differentiating Between Market Structures Precious Diaz ECO/365 March 28, 2012 Gervy Papion Differentiating Between Market Structures Within the business world there are different types of market structures. The market structure of a particular business depends on how many locations there are for a certain business, the way products are distributed [The passive voice is a form of "be" (are) and a participle (distributed). Over-use of the passive voice can make...
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...Differentiating Between Market Structures ECO/365 Differentiating Between Market Structures A market structure in economics describes the state of the market with respect to its competition. There exist several different market structures like perfect competition, oligopoly, and monopolies among others. These markets all produce different types of goods or services, as public and private goods as well as everyday and collective goods. Firms operating in these different market structures utilize the labor market in very different ways because of very divergent uses of energy in each market structure, so it is important for a firm to use the labor market equilibrium principles to their advantage to efficiently cover the costs of production and maximize profits. In economics a good is something defined as any object, service or right that increases utility, directly or indirectly. Goods are further broken down into public and private goods. A public good is a good that can be used simultaneously by many users, which is called non-rival, and people who have not paid for the good cannot be excluded from its utility, which in economics is call non-excludable. Together this means that the consumption of a public good by an individual does not affect the availability of that good to anyone else, which is called being non-rival and non-excludable. It’s obvious to see, however, that a truly non-rival and non-excludable good can’t exist; economists just look at the goods...
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...Differentiating Between Market Structures Anne Giorno ECO/365 Principles of Microeconomics February 16, 2015 Jong Yi Differentiating Between Market Structures The competitive balance between firms is unique in every industry. Some industries are dominated by a single company, while others have thousands of small businesses competing for market share. The composition of competitive firms is known as the market structure. The grocery industry is an example of monopolistic competition. This type of market structure can have a positive and a negative impact on the structures competitive strategies. Monopolistic Competition Monopolistic competition occurs when there are many different firms competing for market share over similar products. There are generally low barriers to entry, which means it is easy for a small company to become a competitor in the market. All of the companies in this system sell similar products and must make a string effort towards product differentiation. Products and services are considered to have a high elasticity of demand; meaning a consumer has many comparable alternatives to choose from. If a firm decides to raise prices, a consumer in a monopolistic competition market should find it easy to find a similar alternative in their local area (Corcelli 2006). This differs from monopolies and oligopolies. A monopoly market is only one single seller. An oligopoly market is dominated by a small number of larger companies selling slightly different...
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...Differentiating Between Market Structures ECO/365 April 13, 2015 Benjamin Zuckerman Differentiating Between Market Structures Coca-Cola Company is one of the world’s leading soft drinks manufacturers. Since its creation, the company has been growing constantly. Today Coca-Cola manufactures more than 500 brands of products sold in more than 200 countries all over the world. Coca-Cola’s main competitor is Pepsi. Therefore, the two companies make up a duopoly where only two companies dominate the market. Both companies sell soft drinks. They also sell homogeneous products so that they can be able to control the price in the market. Coca-Cola Company depends upon the demand curve to adjust the price of its products. Specifically, the company pays great attention to the state of the kinked demand curve. To attract more customers, Coca-Cola uses cut-throat competition to outdo its main competitor: Pepsi (Henry, 2012). Since its inception, Coca-Cola’s main goal has been to emerge as the world’s number one provider of quality branded beverages. The duopoly enables Coca-Cola to use a low-price strategy to maximize its profits. In particular, during holidays, the company uses cut throat price competition to increase its sales and profits. The duopoly gives Coca-Cola the power to raise its product price above the market price without worrying about losing its customers. The duopoly that Coca-Cola is a part of undermines new competitors from entering the soft drinks market. What...
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...Running Head: Market Structures Differentiating between Market Structures Simulation University of Phoenix ECO 365 08/19/2013 There are many advantages of the supply and demand forces on the market and the way it operates. An important advantage is their market regulating utility. They help encourage competition and charge more and therefore make bigger overall profits. Consumers are willing to pay more for better products even though this trend differs in other market structures. One of the major limitations of supple demand forces is a socially undesirable outcome as in the case of a market structure that is characterized by monopoly. This is where one single firm will control all production resources and therefore has exploitative capabilities in the terms of pricing and promoting. One example can be that of an electric company that has a virtual monopoly over production resources of a specific region and charge whatever prices they want. Coca Cola Co. is ran in a beverage industry that is highly concentrated oligopolistic. They compete directly with another major company, Pepsi Co. These two companies hold over 98% of the beverage market in all of the United States. Both Coca Cola Co. and Pepsi Co. compete globally don’t have much competition knocking on either of their doors. Cadbury-Schwepps owns the remaining 2% of the US market share but it’s a struggle for them to try and expand share as well as getting more attention. Oligopolistic market structure...
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