Swarovski has been in the industry area since 1895 and it is one of the biggest companies in the world that creates and sells crystal, Swarovski [2010]. Our company operates in an oligopoly structure due to the following factors which are; many buyers seek to buy luxury products from companies like Swarovski as there are no buyer entry barriers. This is shown to our findings as from 1980 up to 2005 the population was increasing rapidly and from the average we get that when population increases by 1% the quantity demand of the company increases by 2.79% and gives us satisfying results. On the other hand there are some seller entry barriers and this leads into having a few sellers. The seller entry barriers may provide that the already existing companies protect their profits and revenues well and prevent other competitors to entry. The company offers consumption goods that in a certain way satisfy the luxury needs of a consumer and this has been achieved through the specific details on the crystals. Overall this brought the market power to our company that more or less it also helps Swarovski of not being too much competed by other companies. Let us assume that as an oligopolistic company we have the opportunity to use price discrimination in order to increase our profits, would this work for our company? In general our company has to use market segmentation before charging in different prices and identify the needs of the customers that are homogenous and the profilers that are based on different industries, geographic locations, nationalities, ages and incomes. This would help selling in the right prices to the right groups and avoiding any misunderstandings on the way we choose our prices. Price discrimination would also work... ... middle of paper ... ...ustry; the Board has to consider the most important cost drivers that will help the company to move forward. One of them is the scale factors that include the size of the business and luckily we spread successfully in the local and in the international market with over 2.350 stores by also having in mind another cost driver, the location factors. The Board should also help the employees to learn more on how to elaborate the crystals and in the end to receive the best learning outcomes and the best organizational effectiveness for the company. I believe that the entry in the market of crystals is difficult because the firms that are already operating here, they are well known and successful and they have set the “competition game” too high. The source of this can easily be the price and the advertising which due to our findings show satisfying results in profits.
For sale force, we total spent $250,00 of sales office costs in two cities which is, Paris-EMEA and Shanghai-APAC that we found those two cities both have sufficient market size for our target market. The largest market size is in the Paris-EMEA which can both meet all customers need. In the Paris-EMEA, we hired total 6 people in the Paris-EMEA that 2 people for Support, 2 people for Workhorse and 2 people for Traveler. Be compared with Paris-EMEA, Shanghai-APAC doesn’t have a larger market size, but we still hire 7 people in the Shanghai-APAC, and we let 2 people for Support, 3 people for Workhouse and 2 people for Traveler.
The power of a government-created monopoly over the market depends on the existence of close substitute products. If people view emeralds, rubies and sapphires as quite worthy substitutes diamonds over the market power of a relatively limited. In this case, any attempt to achieve increase of diamond prices will lead to the fact that consumers will switch to the acquisition of other precious stones. But if people believe that these stones are considerably inferior diamonds, the company is able to significantly affect the market price of the latter.
This organization belongs to the oligopoly market structure. The oligopoly market structure involves a few sellers of a standardized or differentiated product, a homogenous oligopoly or a differentiated oligopoly (McConnell, 2004, p. 467). In an oligopolistic market each firm is affected by the decisions of the other firms in the industry in determining their price and output (McConnell, 2005, P.413). Another factor of an oligopolistic market is the conditions of entry. In an oligopoly, there are significant barriers to entry into the market. These barriers exist because in these industries, three or four firms may have sufficient sales to achieve economies of scale, making the smaller firms would not be able to survive against the larger companies that control the industry (McConnell, 2005, p.
A couple of Squares has a limited capacity for which to produce their products and smaller companies tend to have larger fixed costs than bigger companies. Therefore, A Couple of Squares must maximize profits in order to ensure that they will stay in business. A profit-oriented pricing objective is also useful because of A Couple of Squares’ increased sales goals. A Couple of Squares increased their sales goals due to recent financial troubles. Maximizing profits is the easiest way to meet these sales goals due to the fact that A Couple of Squares has limited production capacity. The last key consideration favors a profit-oriented pricing objective because A Couple of Squares offers a specialty product. A specialty product often has limited competition, therefore can be priced on customer value. Pricing at customer value will maximize profits as well as customer satisfaction. A Couple of Squares’ lack of production capacity, increased sales goals, and specialty product favor a profit-oriented pricing
Case Study of The Home Depot Preface This Essentials of Strategic Management assignment has been made by three persons which have been working together and individually to finish the assignment properly and in time. Secondly, we would like to thank the company whose websites we were able to visit and use, to get additional information that we could use for leading the assignment of Home Depot to a successful ending. We can say, that it was a pleasure to work on this assignment and would, in the third place, like to thank each other. The persons who worked on this assignment, for the effort and time that is put in the assignment, that brought us to this finished version.
Oligopolies do not compete on prices. Price wars tend to lead to lower profits, leaving a little change to market shares. However, Oligopolies firms tend to charge reasonably premium prices but they compete through advertising and other promotional means. Existing companies are safe from new companies entering the market because barriers to entry to the market are high. For example, if products are heavily promoted and producers have a number of existing successful brands, it will be very costly and difficult for new firms to establish their own new brand in an oligopoly market.
This is a point that rings very true. Store development is important, but there are other key features that need to be considered for continued growth
It is a well-known fact that every firm wants to be successful in its business. Sometimes it is difficult to decide what kind of actions to take in order to achieve it. Especially, it is hard on oligopoly market because this is one of the most complicated market structures. Oligopoly includes many models and theories such as duopoly where are just two producers and which pricing decisions remind monopoly, kinked demand curve, which decreases economic profit, and cartel, which brings economic profit just for the short-run. However, to be a successful oligopolistic firm in the long run, managers should include in the planning process such economic theories and models as producer interdependence, the prisoner’s dilemma, price leadership, nonprice adjustments, and correct using of barriers to entry.
The new president believes that the key to the new strategy is to be able to understand the true nature (i.e. costs of customers and orders. He feels that if the company is able to tie costs to customers in an accurate manner, it will enable the company to better focus on higher profitability. Major Issues: What is the ' Understand the cost structure of the company. Allocate costs on a per customer and per order basis. Implement a new cost system that will support the new cost allocation methodology.
Perfect competition is likely to exist in the supply of sugar cane stalks to mills. There are a large number of farmers (the seller) and buyers. Information about competitors’ prices are easily accessible and the sugar cane stalks supplied are perfect substitutes.
...ompletes an analytical assessment of a firm. A firm establishes its competitive building by investing scarce resources again and again in its value-added activities. By doing this the organizations will be able to give rise superior products and services that the buyer's desire and continue to grow the business and adhere to its strategic plan once implemented.
The barriers of entry that could possibly affect the market in which my event planning business operates is brand loyalty and economies of scale.
...h the full expenses included. Challenge overseeing and incorporating over a huge supply change and developing patterns.
The second market structure is a monopolistic competition. The conditions of this market are similar as for perfect competition except the product is not homogenous it is differentiated; thus having control over its price. (Nellis and Parker, 1997). There are many firms and freedom of entry into the industry, firms are price makers and are faced with a downward sloping demand curve as well as profit maximizers. Examples include; restaurant businesses, hotels and pubs, specialist retailing (builders) and consumer services (Sloman, 2013).
Price competition among rivals is close to nil, industry participants are very competitive when it comes to product differentiation. Product offerings to satisfy consumer demands include a variety of coffee, juices, muffins, bagels, cookies, cream cheese sandwiches, soups and other miscellaneous items.