The Microeconomics of International business
Market structure creates market power and investment. The four market structures: Perfect competition, Monopolistic competition, Oligopoly and Monopoly, divides industries by (Sloman, Hinde and Garratt, 2010, p. 213) “the degree of competition.” Thus, a firm’s market structure depends upon its competition.
(Sloman, Hinde, Garratt, 2010, p. 213) “A market structure that has many firms producing identical products, price takers and has freedom of entry.” Thus, perfect competition has many firms producing similar or same products at different prices. Buyers and sellers do not influence pricings and, firms can enter the industry at any time.
(Sloman, Hinde, Garratt 2010, p. 214) “A market with quite a lot of firms with freedom for new firms to enter.” Thus, a monopolistic competition has many firms and has freedom of entry for other firms yet, product differentiation from other firms.
(Sloman, Hinde, Garratt 2010, p. 214) “There are only few firms and entry is restricted.” Meaning this market is limited in both, the firms and the entry of freedom.
substitutes. Nokia seeks to gain competitive advantage by offering tailored products at cheaper prices as expensive and highly innovative models will not sell. Developed customer countries such as the UK & US have a lower price elasticity of demand paired with a high elasticity of substitution and expectation, therefore Nokia makes innovation and first to market a blueprint of its success. The culture in more economically stable customer countries is for the best and most innovative products…
possesses market power. Explain its source
a) Merck, the producer of a patented cholesterol-lowering drug
b) Aliant, a provider of a telephone service
c) Chiquita, a banana supplier and owner of most banana plantations
Answer to Question:
a. Merck like most drug companies will have a patent for their cholesterol drug. The patent is essentially the legal rights to the formula for the drug and it prevents other companies from being able to copy/ produce the same drug Merck is producing. A patent…
There is currently a situation occurring with two of the country’s biggest sugar producers. The two companies, Mega Corporation and BIG Enterprises, are considering a merger of their two companies to become one company, the Mega-Big Corporation. If this merger proceeds as planned, then the Mega-Big Corporation will control over 80 percent of the market share in Brazil. With such a large market share, the Mega-Big Corporation would be considered a monopoly of the sugar market. In the discussion…
We live in a very different time in terms of innovation and research. It is funny how small, start-up companies can become market leaders and change the structure of industries within a matter of days with a breakthrough technology or process. We live in a day of age where there is no such thing as static market power in the electronics industry, because almost anything and everything may be imitated with the current manpower and technological know-how, whereas the products that are valuable and…
established rivals, threats from new entrants, the power of buyers, the power of suppliers, and the availability of substitutes. Every business decision by firms take these five elements into consideration and how they will affect a company’s bottom line. This paper…
Groupon is more or less an aggregator platform for a two sided market and it cannot sustain unless both of the parties are benefited.
• In the long run the fact that even after high discounts, half of a merchant’s profit and non-returning customers, decline in quality of services might hamper its growth as merchants might get reluctant to partner up with them in long run.
• This, may destabilize the 2 sided market and may lead to a collapse. However, their new efforts like Groupon now &…
hnson & Johnson in the global market place
Many businesses have expanded into overseas markets, and now the tendency has became more and more rampant, and, gradually, formed a mature global markets. The "global market" refers to the international trade, and the country 's domestic market is linked to the area of exchanging. Furthermore, the development and the expansion of the world market have eventually turned into the most important content of the world 's economic and historical…
Synergy is one of the most important reasons that make Procter& Gamble implement the related constrain diversify strategy. This is, Synergy can help P&G in several ways:
1, Gain market power relative to their competitors: P&G can gain its market power through both multimarket competition and vertical integration.
2. Combining talent and technology: the second important thing about synergy is that it can improve the firm’s efficiency that can derived from economies of scale, economies…
industry. Therefore, the PowerBand has a greater bargaining power and are more flexible in choosing its supplier offering the lower costs. (However, due to our specialized skills and technology required for the production, the PowerBand may cost higher to find skilled manufacturers.)
Force 2. New Entrants
Our product retains a range…