Running head: Differentiating between Market Structures Paper Differentiating between Market Structures Paper Melissa Blanco, Mary L. Lockett, Saundra Luke University of Phoenix ECO/212 Principles of Economics February 1, 2010 Instructor Michael Shackelford Four market structures makes today’s economic market, knowing the difference between the four can help a business realize which market would be more suitable for their firm. The term market structure refers to “the set of industry characteristics that affect the extent or rivalry in the market and ultimately affects market performance related to pricing and output.” (Humboldt State University, 2000, para. 2) The economic market consists of competitive market, monopoly,
Strategy and Economics of Vertical Chain Vertical chain in its simplest form starts with the acquisition of raw material and ends with the distribution and sale of finished goods. The strategy to participate in one activity (one industry) or many activities (many industries) along the value chain has become a key consideration of today’s corporate planning. Firm needs to make a decision it will only manufacture the product or would engage in retailing and after sales service also. We will be discussing the Vertical Boundaries of the firm from the perspective of the Vertical chain and the production process and examine how firms take a make-buy decision. We will also look at bureaucracy issues that large firms suffer which are due to the non-performing managers and workers or the divisions, for e.g.
Suppliers may have more power relative to the wholesalers, who don’t have as much power. Rival Firms: Rivalry, I would say, is fairly strong. Because of the extreme competition within the market as well as the high costs of raw materials, it’s generally difficult to gain much of an advantage over rivals. Because of the various channels available to consumers when purchasing jewelry (physical stores, online, etc), the competition is even MORE fierce. It didn’t help that a lot of their online competitors copied BN’s method of buying gemstones from their suppliers for specific purchases.
Today’s market landscape looks much differently than it did when Blockbuster Video was at its peak. Many more competitors fight for the consumer’s dollar; however, there are still a few dominant companies that stand out among them. These include Netflix, Redbox, Apple, and Amazon. 2. Hypothesize the basic short-run and long-run behaviors of the model in the industry you have chosen in a “market economy.” Blockbuster became an almost instant hit with its brick and mortar stores.
It is most common used when the buying firm wants to enhance competition. In contrast to single sourcing multiple sourcing is when you have more than one supply/manufacturing firm. Multiple sourcing is more of arm´s length/ a more distanced and impersonal relation with many suppliers, in opposite to the relations in single sourcing. 2. Discuss when, and why to use single-sourcing and when and why to use multiple sourcing E.x.
Introduction Wal-Mart is a marketing and retailing juggernaut. Since 1962, Wal-Mart has been the model for retailing in the United States. Generally, a retailer who succeeded in getting a bargain from their wholesaler would leave his retail prices unchanged and pocket the extra capital. Mr. Walton, by contrast, realized he could do better by passing on the savings to his customers and earning his profits through volume. This was and is still the cornerstone of their business model.
Policymakers in the government can respond to the monopoly problem by trying to make industries more competitive, regulating the behavior of monopolies, turning some private monopolies into public enterprises, or do nothing. Price discriminate means the exactly same product could sell to different consumers for different prices, even though the costs of producing for the products are the same. Price discrimination is impossible when product is sold in competitive markets. For a firm to price discriminate, it must have market power. There are three lessons to be learned about price discrimination are price discrimination rational strategy for a profit-maximizing monopolist, price discrimination requires the ability to separate customers according to their willingness to pay, price discrimination can reduce the inefficiency inherent in monopoly.
Wal*Mart Stores, Inc. , although combating in the highly competitive discount merchandise retailing industry , has been able to establish its competitive advantage through the development and deployment of its resources and capabilities and by differentiating itself from its competitors. I found the concept of internal resources and capabilities analysis and value chain analysis in differentiation very useful for me to understand and analyze this case of Wal*Mart. Wal*Mart competes in the merchandise retailing industry which has low profit margin, high buyer/supplier bargaining power, intensive rival competitions and relatively easy entry criteria. In an environment like this, a firm such as Wal*Mart would need to resort to itself, to explore the firm’s own resources and capabilities, and to search for the source of competitive advantage internally for creating profit. Because of this, I believe the internal resources and capability analysis concept is appropriate and useful when applied to the particular case of Wal*Mart.
There are four competing Business, Government, and Society (BGS) models, the Market Capitalism model, the Dominance model, the Countervailing Forces model and the Stakeholder model. The purpose of these models are simplified descriptions of the Business, Government and Society relationship. According to the Market Capitalism Model business operates within a market environment and responds primarily to the powerful economic forces. There are many important assumptions regarding this model. Some of the key assumptions include slight government interference in the economy, consumers are able to make decisions because they are informed about the products they are looking to purchase and the price of the products and banks and laws exist for the sole purpose of easing commerce.
Planning it strategically, Tyco seems to have chosen to enter businesses that are unglamorous but provide an opportunity for profitability and growth. Further, Tyco choice of products which compete in stable, low-tech and standardized products requiring limited R&D spending is also a part of its strategy. This has helped the company to control costs and reap the benefits of standardizations and consolidation of processes and systems adding to the corporate advantage. To further elaborate this, with acquisition as its major strategy early on, in the days of Mr. Gaziano, Tyco earned a reputation as a „corporate raider‟. Later on, however, under Fort and Koslowski, things operated under more diligent control.