Monopolistic Competition Essay

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A monopolistic competitive market is when there are many sellers. The product varies between companies but is generally the same. Companies in this market are not price takers. To enter a monopolistically competitive market there is free entry and exit put extremely hard to penetrate the already existing companies. A good example of a perfectly competitive market would be the bottled water industry. There are many buyers and sellers and most of the market is dominated by known brand names, the other by private labels. Specifically Dasani has the highest market share of 10% other than 20% being to private labels. The rest of the companies in the bottled water industry hold under 9% of the market share such as Nestle Water Pure Life, Aquafina, Poland Spring, Glaceau Smartwarer, Deer Park, Ozarka, and Fiji. But because Dasani is the highest sold bottled water, they recognized that they have majority of the market share, and started to branch out to make them monopolistically competitive. They do this by branching out other than bottled water. Reason Dasani holds most of the market share is because they know how to transform their product while offering many different options and pairing up with the competitors. Dasani made over 8 billion dollars last year. Due to Dasani’s constant efforts to evolve and be at the top, they have placed themselves in a perfectly monopolistic market. Dasani has created flavored water and drops. Dasani also recognized that their main threat was the soft drink industry. Their motto is, “if you can’t beat them, join them”. Dasani did just that, they had a contract that issued a Dasani water bottle to every happy meal at McDonald’s in efforts to create a “Go Active Happy Meal”. That mindset of joining the competitor instead of trying to beat them singly handedly put Dasani at the top of the bottled water

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