Duopoly Between Coles And Woolworths

To conduct research, several assumptions are made, to limit the uncontrollable variables. It is assumed that the supposed duopolistic market structure obtains strong barriers to entry which allows firms to be in control of the industry and practice pricing strategies that have direct impact on local retailers. As a corollary, it is also assumed that Coles and Woolworths are not acting as a collusive duopoly, in effect acting as a monopoly which is considered illegal, causing immediate government intervention. This would cause prices to be more steady in effect driving Harris Farm, Mario’s Market and IGA out of the market. Additionally, it is assumed that both Coles and Woolworths are not under strict government regulations which increase the costs of production, thus increase prices and assist local retailers to remain competitive. Additionally, it is assumed that Coles and Woolworths have high brand loyalty, acting as a barrier to entry thus more adaptable …show more content…
However, through empirical research the most effective in customer acquisition is a physical store. Critically the food market is a large part of sales take place thus allowing duopoly to be more noticeable alongside with the ramifications of such structure.

The subsequent research question and goal has been developed in order to resolve the consequences of the duopolistic market structure of Coles and Woolworths on local retailers.
To what extent is the current market structure of Coles and Woolworths in the lower north shore of Sydney impacting the price of fruits and vegetables in local retailers?

The goal of this essay is to investigate the Sydney lower north shore market, apply economic models to the behaviours of the firms dominating the market and

discuss the implications of this behaviour. (The goal is to understand the whole market better – can help consumers/firms/lawmakers etc.).

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