Answer the following questions based on a business or industry which which you a
ID: 1094715 • Letter: A
Question
Answer the following questions based on a business or industry which which you are familiar. You can choose a business or industry in which you are employed or a family member is employed or just an industry in which you are interested. Which type of market does this business or industry compete in? List the characteristics of the market type from the text and explain how your example fits them and where it does not. Be sure you discuss all of the market characteristics. Describe how your example firm prices it's product(s). Does it's behavior fit what would be expected based on your answer to question 1? If not, why not? Sometimes markets change over time. Do you expect that to happen in this industry? Why or why not? What changes are most likely? Provide at least 2 outside sources for information on this business or industry.
Explanation / Answer
Company S is the manufacturer and distributor of home appliances. This organization holds a dominant position in the market and also has flourished internationally.
The market system on which the organization is competing is oligopolistic market system. The organization has a handful of competitors in the market which holds similar dominant position in the market. The markets on which the company operates its business are matured and developing markets where it can find new scope of business.
Characteristics of Oligopolistic Market System
Under this market system the company can build up its brand image and can act as industry giants.
The customers who buy home appliances will always first look for quality products. So under this market system the customers will first focus on such dominant companies.
The companies under this market system will have to consider the prices of the competitors to gain competitive advantage.
Characteristics or developing and matured markets
In such markets the customers have the potential to buy new and innovative home appliances.
The customers will be adaptive to modern technologies.
Pricing strategy of company S
The company has adopted skimming pricing strategy. Initially it priced a bit high and succeeded in achieving a good brand image. Then it started offering products in competitive prices. This strategy certainly fits the characteristics of the oligopolistic market system. In developing and matured markets the customers will look for quality and branded products especially in the case of home appliances. So building up a good brand image by providing quality products at high prices will be an effective strategy in this market.
Change is a concept which cannot be avoided in a market place. The changes in this market can happen in the preferences of the customers, technology etc. For example in the present market traditional televisions are not available. Only new technology televisions like LCD, LED, plasma etc are available. Customers also prefer these changes.
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