Advantages and negatives of the oligopoly market system

This article will discuss the advantages and disadvantages of the oligopoly market system. Supermarket has taken into the service for man for long. The root base of supermarkets will be the Co-operative of the nineteenth century. At the start of the early 20th century the folks come up to a concept for advertising goods. From then on there become the first Supermarket that was create in January 12th, 1948 in UK. (Brainy Background, 2010) As soon as the first supermarket has been set up, a large volume of supermarkets arrived such as Tesco and Sainsbury's. The supermarket industry is now developing in an exceedingly broadband. As the supermarket is one of the great advancements in people's lifestyle, it becomes one of the most important places for all your people. Today, the supermarket industry in UK has already been changed into oligopoly market. This article will discuss the characteristics of oligopoly market, and then discuss the kinked demand curve, non-price competition and the marketing mix in the oligopoly market.

First of all, an oligopoly market means that several relatively interdependent companies which concentrate the resource and compete with each other. Therefore, this become highly competitive and the oligopoly companies sell the homogeneous products which are branded. (Tutor2u, 2010) If the business markets the homogeneous products, the consumers won't have the new and better product in an exceedingly short time as a result of competitive between your firms. Each of them sell the same product so that there won't be pressure to allow them to be survived in the united kingdom Supermarket market. Another feature of oligopoly market is that the market has been managed with a few big companies. As a result, these companies will control the market as they like. That could let another characteristic happened which is called price machine. (Teacher2u, 2010) Price maker is a kind of men and women or organization who set up the purchase price for the product on the market. These people could easily control the marketplace in ways the oligopoly businesses want, so the consumers will not get some personal preferences in this kind of market, such as discount, promotion and so forth. Therefore, from the characteristics above, it easily implies that the oligopoly market does huge harmful for the normal consumers. If the UK supermarket keep on being such as this, the consumers will not get preferences any longer.

The next point which will discuss is the kinked demand curve. The empty area is where price steadiness happens (from physique 1). These oligopoly businesses always use the non-price competition to increase their outcome quantity. Relating to both of these figure, in cases like this, there are no growing in price so that the consequence is exactly what consumers want to see.

Non-price tournaments, is a kind of competition which is not focus on the price. That presents there are a great many other competitions in this market. In the Tesco. com and Asda. co. uk, it shows that the top Four's official websites are some promotional activities, for example discount and cash back. Although, there are a few different options for non-price competition.

Figure 1:

Figure 2:

Reported by TIMESONLINE 2007, Tesco, Asda, Sainsbury's and the previous Safeway, and the dairy products companies Wiseman, Dairy products Crest and Cheese Company are uncertainty for the dairy products product price in 2007. Because of this, Tesco possibly get a number of number for approximately 80 million bill. After that, Tesco is going to get back the amount of money by law. So the case shows that there are some mistakes in the forex market system. This may also damage the market system too and the buyer assurance can be lost at the same time.

The last and which is the main that can't be overlooked is the marketing mix for the oligopoly market system. To begin with, in an oligopoly market, the place that the consumers can go to choose the products are mainly the best Four. The consumers can not have many different choices for choosing the place to buy things so that Big Four has already control the marketplace as they need. Then, the purchase price can just create by the price maker. In an oligopoly market, the price machine is the oligopoly organization which ultimately shows that the companies can set up the purchase price as they want. For the product, every oligopoly company produces homogeneous product and service. The Big Four use their selves' benefits to build high hurdle to entry which is to protect their market talk about. These can make the consumers own less choices for purchasing the product. Promotion also doesn't always took place in the oligopoly market. All in all, the oligopoly market do hazardous for the consumers.

In realization, from the discussion above, we realize that the characteristics of ver, the utmost competition in the oligopoly market can be advantageous to the improvement in providing various products to meet up with the needs of consumers. It will be significant in their oligopoly market and the marketing mixture and kinked demand curve demonstrates the oligopoly is beneficial to the consumers. And oligopoly is also good for sellers too. What is more, our consumers are able to enjoy a well-developed purchasing environment.

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)