Demand for low calorie microwavable food is mainly dependent on the price, what’s an available substitute, the advertising costs and consume income. We can deduce from this that the market for this product will fit into a monopolistic competition type market.
This is one of 4 basic market structures and is characterized by a large number of small firms with similar but un-identical products sold by all firms. There is little or no interdependency among these firms so that they are able to price their products with little or no concern for how the competition will respond to the price change; there are no strict rules about entrance into and exit out of the industry, and lastly a wide knowledge of prices and technology with little or no possibility of fixing prices. (thisMatter.com)
From the past two assignments, we can conclude that the demand for low-calorie microwavable food is inelastic in nature; consequently, we can see that an increase in the price of food will lead to the decrease of quantity demanded by less than equal amounts. With the purpose of maintaining their products as inelastic as possible, the firm needs to separate its own products from that of other firms. With a product that is dissimilar from others, substitution may be difficult, which means customers will continue to buy making true the fact that the bigger the amount of product differentiation, the larger the market share/power becomes. Subsequentl...
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...ately. The firm as a whole needs to understand that goals put in place may differ at times and will need to acknowledge that this actually allows it to make changes and to bring goals on both sides into alignment. (Clark, Demand Media)
For many corporations, value-creating growth is a strategic task. To be successful, the company must be good at “developing new businesses.” This is because like Alfred Rappaport says “the greater part of the company’s share price mirrors “expectations for the growth of its current businesses.” The shareholders will also only earn a normal return if those expectations are met. So, to deliver “superior long-term profits” - growing the share price faster than competitors’ share prices; the management has to repetitively surpass these expectations. This can also be achieved by focusing on new business opportunities. (Rappaport 2006)
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