Introduction
Competition in business can vary from one organization to another, depending upon individual preference and the nature of the industry. In economics, market structure denotes those firms who produce homogenous goods. On the market structure spectrum, an organization starts with perfect competition on one end and makes its way towards monopoly on the other extreme end. In the middle of these two contrasting market structure types, we have duopoly, oligopoly and monopolistic competition based on the level of competition and market concentration. Since perfect competition is a hypothetical phenomenon organizations shall not indulge in this. Companies and organizations tend to move from monopolistic competition and make their way towards …show more content…
Based on an analysis conducted in February by Roy Morgan (2014), the two giants own 72.5 percent of market share out of the $82 billion grocery industry (as cited in The Australian, 2014). To go in the schematics, Woolworths alone has a staggering 39 percent share out of the total 72.5 percent with Coles making up the rest with their market share of 33.5 percent. Divulging in individual histories of the two giants, Woolworths is a supermarket/grocery store chain in Australia, owned by Woolworths Limited and in total have 872 stores across all of Australia. In contrast Coles Supermarkets, commonly known as Coles, is an Australian supermarket chain owned by Wesfarmers and the better half of Woolworths in the duopoly that they have created today. The essence of duopoly lies in the successful dominance of a particular industry by only two players and without a doubt Woolworths and Coles have done it …show more content…
The cynical picture is that the duopoly, at hand, reduces prices of limited products to give an impression that the “Overall” prices have been reduced, when in fact there are over 20,000 worth of products on the shelves with prices higher than par. At the end of the day, it is the government that needs to take a stand against this as the small retailers fear the power of the duopoly. They do not want to spite the supermarket giants and get embroiled in a pricing war with Woolworths and Coles.
Conclusion
To sum up the essay, the issue at hand is the unfair power with Woolworths and Coles as a duopoly over the grocery and supermarket industry. This unfair practice has led consumers, facing high prices in majority of the goods provided by the supermarket giants and has led to competition being driven out of the industry depriving the customers with variety and innovative products and a lack of choice. Therefore, the ACCC and government of Australia will have to come with suitable policies allowing for more competition to flourish in the
Competition in business can vary from one organization to another, depending upon individual preference and the nature of the industry. In economics, market structure denotes those firms who produce homogenous goods. On the market structure spectrum, an organization starts with perfect competition on one end and makes its way towards monopoly on the other extreme end. In the middle of these two contrasting market structure types, we have duopoly, oligopoly and monopolistic competition based on the level of competition and market concentration. Since perfect competition is a hypothetical phenomenon organizations shall not indulge in this. Companies and organizations tend to move from monopolistic competition and make their way towards …show more content…
Based on an analysis conducted in February by Roy Morgan (2014), the two giants own 72.5 percent of market share out of the $82 billion grocery industry (as cited in The Australian, 2014). To go in the schematics, Woolworths alone has a staggering 39 percent share out of the total 72.5 percent with Coles making up the rest with their market share of 33.5 percent. Divulging in individual histories of the two giants, Woolworths is a supermarket/grocery store chain in Australia, owned by Woolworths Limited and in total have 872 stores across all of Australia. In contrast Coles Supermarkets, commonly known as Coles, is an Australian supermarket chain owned by Wesfarmers and the better half of Woolworths in the duopoly that they have created today. The essence of duopoly lies in the successful dominance of a particular industry by only two players and without a doubt Woolworths and Coles have done it …show more content…
The cynical picture is that the duopoly, at hand, reduces prices of limited products to give an impression that the “Overall” prices have been reduced, when in fact there are over 20,000 worth of products on the shelves with prices higher than par. At the end of the day, it is the government that needs to take a stand against this as the small retailers fear the power of the duopoly. They do not want to spite the supermarket giants and get embroiled in a pricing war with Woolworths and Coles.
Conclusion
To sum up the essay, the issue at hand is the unfair power with Woolworths and Coles as a duopoly over the grocery and supermarket industry. This unfair practice has led consumers, facing high prices in majority of the goods provided by the supermarket giants and has led to competition being driven out of the industry depriving the customers with variety and innovative products and a lack of choice. Therefore, the ACCC and government of Australia will have to come with suitable policies allowing for more competition to flourish in the