Differentiating Between Market Structures

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Differentiating Between Market Structures ECO/365 09/08/2014 Differentiating Between Market Structures Target Corporation is a company that entered into the discount retail business in 1962. The company has grown into a full service retail chain from clothes to food. Its major competitors are Wal-Mart, Costco, and K-Mart who all bring the same type of goods into play. Market structures can vary and these types of retailers are all the same which will be explained throughout. Differentiating between the market structures of this business will allow for explanations of how different sectors of industry will vary and how to come up with some competitive strategies to grow the business within the industry. Market Structure Target is within the oligopoly market structure. Oligopoly, according to Colander (2013), a market structure in which there are only a few firms and firms explicitly take other firms’ likely response into account. Being that there are only a few different businesses like Target, they tend to set their prices according to the rivals. This practice keeps these businesses in the oligopoly market structure. They must take into account the expected reaction of the other companies. Oligopoly market structure has no definitive plan in place; it is based on strategic planning. This means the company is ready to react to what a competitor may do. Target could have very well been in the monopolistic competition structure but did meet some of the structure points. Monopolistic competition structure has many firms and do not usually take into account the responses of other firms. This was the main difference between oligopoly and Monopolistic competition. Wal-Mart, K-Mart, Costco, and the few others in the scope of this type of retail chains are more considered a few than many. They all tend to react to each other’s

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