Actual work where 2 students given their post on this:

Discussion Board – Oligopolistic Industries

An oligopoly is characterized by a relatively small number of firms offering a similar product or service. Oligopoly products may be branded, as in soft drinks, cereals, and athletic shoes, or unbranded, as in crude oil, aluminum, and cement. The main distinction of oligopoly is that the number of firms is small enough that actions by any individual firm on price, output, product style, quality, introduction of new models, and terms of sale has an impact on the sales of other firms in the industry. Review the Table 12.1 (pg. 416), select a dominant single firm, duopoly firm, and triopoly firm and discuss if you foresee any weaknesses in the three firms you selected that would allow entrance into this market or if one of the firm has enough strength to become a monopoly?

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Jacob Work:

Oligopoly market condition is referred to a situation where there is less competition within the market but a small change in one activity of other organisation can influence and impact other business activties. The oligopoly firms are posing a great impact on monopoly firms and having significant impact on markets as well. Monopoly firms are referred as single firm which completely rule the market in terms of quantity and prices and entire market rely on its services. The oligopoly market aims to gain returns on investments above its regular returns from the market. I would like to provide details of Nike company which is one of the dominant shoe manufacturing company and has few rivalries like Adidas and Reebok(Skinner., 2013).

Nike is one of the biggest shoe manufacturing company and has served the market with its dominance for good number of years and is always striving to find its position in market competition with good products and services. As per recent reports, Nike holds almost 43% of market share when it comes to athletic shoe market and is referred to be very dominative figure in entire shoe market segment and the main reason behind its success is that Nike never fails to reach its customers with different marketing strategies, well-constructed and implemented business plans and good pricing strategies etc allowed the business to rule the market for good time. Besides all its dominating factors, Nike is also having its own set of concerns and experienced negative sides of business at one point of time. But the issues Nike faced were not that big to make the company an oligopoly in the market. Infact Nike was in a very deserving position to occupy monopoly market with its aggressive business models and the amount of experience they acquired overtime would guided them to turn their business a monopoly structure and could have handled risky situations in effective manner(Bain., 2017).

Duracell is one such duopoly firm and was holding a total of 43% market share which is huge in that time period. The company Duracell was made famous by its parent company Proctor & Gamble which is a duopoly firm. The main reasons behind less competitors in market in terms of batter manufacturing was because of handling raw materials and also environmental concerns to handle battery and disposing them etc and many experts believe that monopoly in this segment is quite a difficult task and often considered to be impossible. Battery manufacturing, raw materials, maintenance and disposing all these factors are to be considered. Though if the existing firm experience any kind of weakness also yet it fails to be a monopoly in market in battery market segment and to be an oligopoly in market they need competitors which is difficult to find(Caffyn et al., 2018).

Triopoly market system holds three companies like Kraft foods, Nestle and PepsiCo which are has their own significance in the market segment of packaged food industry and are global brands all together. They have many ways to convert their business structure to duopoly by combining any two firms and merge to form a one big firm. Though Triopoly based business structure are less prone to be risks in comparison to monopoly or duopoly. If in any case any of the firm is willing to form a monopoly busines it would result damaging to the economy of other firms as monopoly has strong dominance in entire market and will lead the other firms in trouble in terms of competition and in some case, there are high chances of ruling out other companies form the market and if the monopoly fails to serve the need then entire firm and economy will collapse.

References:

Bain, M. (2017, September 6). Nike is still the king of the sneaker industry, but even great empires can fall.

Caffyn, G., Chen, Y., Monllos, K., Monllos, K., Joseph, S., Seb Joseph, … Acxiom Branded Content. (2018, September 16). How Duracell is addressing its programmatic problems

Skinner, L. (2013, December 2). Oligopoly of sport brands.

Varun Work:

Gillette is a single firm that is dominating the razor and blade market. They created a brand value by marketing their products well and maintaining great quality. Even though tried to beat their market share, none of them couldn’t be able to stand strong. It has enough strength to become a monopoly because people get used to this product and it’s hard to change the mindset of people to a new brand. I would like to select Home Depot appliances company which falls under duopoly firm. According to the new research (Morgan, 2021),

Home Depot posted a 9.1 percent gain, creeping ever closer to Lowe’s position atop the throne. Unsurprisingly, Sears posted the largest losses in 2019 as Sears (-82%) and Sears Hometown Store (-67.4%) continue to close down operations across the nation. Every appliance company is maintaining quality products, but Home Depot is providing great service which is attracting more customers towards them. Sears and Lowe’s companies are ahead of Home depot when we look at the market share but comparatively, they are not doing well and losing their brand value. So, there is a lot of space for Home Depot and it can use its goodwill in the market to attract customers and can turn into a single firm.

               Apple company falls under a tropology firm. They are leading the market by providing a great service to users and maintain a standard quality. Their loyal customers are helping the company to stay ahead of other competitors. As per the research from Chauhan (2019), apple dominates the global handset market by capturing 66% of industry profits and 32% of the overall handset revenue. They do have the potential to grab other customers, but they have to release products for the economic class people.  They do have the potential to become a monopoly. They have to come up with great strategies to occupy the whole space.

                                                   References

Morgan, G. (2021, January 7). Top 50 Majap Dealers Report: Overall Major Appliance Sales Fall .9% In 2019. TWICE. Retrieved from https://www.twice.com/retailing/retail/top-50-majap-dealers-report-overall-major-appliance-sales-fall-9-in-2019

CHAUHAN, K. (2019, December 19). Apple Continues to Lead Global Handset Industry Profit Share. Counterpoint Research. Retrieved from https://www.counterpointresearch.com/apple-continues-lead-global-handset-industry-profit-share/