Discuss about the Market Structure for Different Industries.
In a country’s economy, different industries have different structures. This report discusses the market structures in the context of Australia. It analyses various market structures such as perfect market competition, oligopoly market, monopoly market, monopolistic market, and duopoly market (Krause et al, 2012). Furthermore, it discusses about the oligopoly, monopoly and monopolistic market in Australia. These market structures drive the companies to treat the different market condition differently. A market structure shows the level of competition between the different sellers in market. Structure of market for goods as well as for services determines the competition level in the market (Fitzgerald and Haller, 2014). The market structure shows all the necessary sides of the market. It shows the nature of the product, entry and exists of the company, and market potential. Apart from this, companies have to study these market structures to formulate their marketing strategies with a view to subsist ever long.
A monopoly is a type of a market in which there is only a single producer of the commodity. Because of this, the seller is the King of the market and has relatively less competitors in the market. A single seller can create barriers for potential competitors using copyright, patent, and trademark. It is a market situation where only a single firm is the leader of the whole market (Lambert and Kwon, 2015). Monopoly market is completely opposed of the perfect competition market.
The Quasar computers enjoyed the monopoly of Australian market. Quasar computer was launched an optical notebook naming ‘Neutron’ with a unique characteristic in 2003. Quasar got a patent right over the optical notebook for getting the power of monopoly in the market (Baldwin and Scott, 2013). These computers have energy saving optical technology and the batteries are rechargeable, which can be last to three days. Quasar computer enjoyed the monopoly for three years by using price-skimming strategy.
Quasar was selling a unique product that I has a patent on, which gives them the advantage of enjoying the monopoly. A monopoly also results when the consumers do not have a choice other than that. It is not so easy for new or another firms to entry in the monopoly market. Quasar decided the price of the product by using price-skimming strategy. Due to monopoly, the firm can set pricing of the goods according to their benefits. The demands of the Quasar product were high because no one else was selling products resemblance to the optical notebook.
An oligopoly is a prime example of imperfect competition. In Oligopoly market, the seller of the product is the key person of the industry, which drives the prices to rise (Tyers, 2015). Oligopoly market is one of the popular types of the market in Australia, in which there is only a few numbers of the large firms with a huge market sharing.
In Australia, many examples are there for this type of the market structure. The automobile sector is also deal in an oligopoly market. In this, sector some of the companies controlling the entire market such as Holden, Toyota, Hyundai, Ford and Mitsubishi. Holden is one of the car manufacturing companies of Australia. Holden car is founded in the year 1856 in Australia. Toyota gives tuff competition to the Holden. In the year 2013, Toyota became the highest seller of cars, defeating Holder in Australia. Holder uses pricing strategies to compete with the Toyota.
Advertising plays a very vital role in oligopoly market. Good advertising can able to grab the attention of the public and it tempts the consumer. Holden car uses advertising technique to face the competition effective (Dickenson, 2012). The company uses advertising its products with mass media, which includes television, radio and newspaper publishers.
Monopolistic competition is a situation in which there are few sellers and a large number of buyers. Monopolistic competition is a market, where the company has many competitors selling slightly different products (Huck et al, 2016). Packaging and display are two important aspects, which differentiate the goods of the companies. Advertising is the key factor that differentiates among companies products. Along with this, monopolistic competition imparts the benefit to sellers, which is ‘brand loyalty’. The customer picks the brand providing better satisfaction over others.
The coffee industry in Australia is one of the great examples of monopolistic competition. There are many of the coffee shops such as Costa coffee, Café Nero, and Starbucks, which are leading in the market (Muller, 2012). These companies give a tight competition to each other in the market. These companies selling the similar product but differs in their coffee cups, ingredients and presentation. To differentiate themselves from their competitors, Starbucks uses different types of beans, Costa uses speedy services and Café Nero provides quality services to their customers. Differentiation is the key factor in the monopolistic market and each of the firms uses differentiation techniques to compete with their competitors in the market.
From the above essay, it can be concluded that there are different structures of the market. In each structure, companies develop strategies and treat the market differently. In Australia, mainly oligopoly, monopoly, and monopolistic competition are prevailing. Monopoly market allows the Quasar Computers to charge high price from the customers in Australia. Oligopoly market gives a stiff completion between the companies due to the similarity of product or services. At the same time, the monopolistic competition gives a condition where the sellers sell their product with slight differentiation in terms of pricing, product ingredients, packaging, and labeling.
“Monopolistic Competition: Coffee Industry.” Google. Last modified September 28, 2012. https://prezi.com/i4vsfq5trnrf/monopolistic-competition-coffee-industry/.
Baldwin, William, and John Scott. Market structure and technological change: Economics of technological change: 2 Volume 18 of Fundamentals of pure and applied economics. reprint. UK: Taylor & Francis, 2013.
Dickenson, Jackie. "The past in Australian advertising, 1906–2010." Journal of Australian Studies 36, no. 1 (2012): 65-79.
Fitzgerald, Doireann, and Stefanie Haller. "Pricing-to-market: evidence from plant-level prices." The Review of Economic Studies 81, no. 2 (2014): 761-786.
Huck, Steffen, Gabriele K. Lünser, and Jeanâ€Robert Tyran. "Price competition and reputation in markets for experience goods: An experimental study." The RAND Journal of Economics 47, no. 1 (2016): 99-117.
Krause, Michael U, and Harald Uhlig. "Transitions in the German labor market: Structure and crisis." Journal of Monetary Economics 59, no. 1 (2012): 64-79.
Lambert, Thomas E, and Edward Kwon. "Monopoly capital and capitalist inefficiency." International Review of Applied Economics 29, no. 4 (2015): 533-552.
Tyers, Rod. "Service Oligopolies and Australia's Economyâ€Wide Performance." Australian Economic Review 48, no. 4 (2015): 333-356.