All organizations fall into one of four different market structures; perfect competition, monopoly, monopolistic competition, and oligopoly. The market structure an organization is grouped in is based on characteristics such as competition, products, and ease of entry into the market. Powerlifting is a specialized sport with only a few companies selling the custom equipment required. Titan is one of the companies that sell powerlifting equipment. The following paragraphs will identify which market structure Titan belongs to and how that market structure compares to the others, identify three competitive strategies for Titan, evaluate the competitive strategies in Titan’s market structure, and make recommendations for how Titan can maximize profits.
Identify Market Structure
Oligopoly
Powerlifting is a specialized way of lifting weights. One of the companies that supply the equipment necessary for the sport is Titan. Titan falls into the oligopoly market structure. A limited number firms and each firm using the decisions made by other firms to make their decisions characterize an oligopoly (Colander, 2010). The International Powerlifting Federation, otherwise known as IPF, must approve equipment in a powerlifting meet. There are only eight companies approved by the IPF and five of those only for knee sleeves. There are only three companies approved to sell squat, deadlift, and powerlifting suits and one of those is Titan (International Powerlifting Federation, 2013). Since there are a small number of companies approved by the IPF, and the companies pay close attention to what each other are doing when making decisions oligopoly best describes Titan.
Monopolistic Competition, Monopoly, and Perfect Competition
Titan does qualify a...
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...rs and their equipment needs and fits the oligopoly market structure. Titan would benefit from a couple of competitive strategies giving them a greater competitive edge in the market. No matter which market structure a company falls into they will benefit from pursuing competitive strategies to increase their profit margin, and be a more effective business.
References
Colander, D.C. (2010). Economics (8th ed.). Retrieved from The University of Phoenix eBook Collection database.
International Powerlifting Federation. (2013, November 21). Approved list of apparel and equipment for use at IPF sanctioned competitions. Retrieved from http://www.powerlifting-ipf.com/17.html
Thompson, A., Peteraf, M., Gamble, J., & Strickland, A. (2011). Crafting and executing strategy: The quest for competitive advantage: Concepts and cases (18th ed.). New York, NY: Mcgraw-hill/irwin.
Market Analysis Summary The global sports and fitness clothing market is expected to soon reach over $125 billion dollars (PR Newswire, 2015, June 26) and individuals across the U.S. are becoming more active (Institute for Health Metric and Evaluation, 2013, Jul 10). The breadth of the overall market covers many subsets of products and consumer groups. Target segment. There are two primary segments in the market; sports apparel and fitness clothing.
Hubbard, R. G., & O'Brien, A. P. (2010). Economics (3rd ed.). Boston, MA: Pearson Hall.
McConnell, C., Brue, S., & Flynn, S. (2012).Economics: principles, problems, and policies. (19 ed., p. 375-390). McGraw-Hill/Irwin. Retrieved from http://online.vitalsource.com/books/0077771699/id/L4-1-1
...rticipants need to be physically fit and it fits the definition of a sport according to the WSF and IHSA.
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.
An oligopoly is defined as "a market structure in which only a few sellers offer similar or identical products" (Gans, King and Mankiw 1999, pp.-334). Since there are only a few sellers, the actions of any one firm in an oligopolistic market can have a large impact on the profits of all the other firms. Due to this, all the firms in an oligopolistic market are interdependent on one another. This relationship between the few sellers is what differentiates oligopolies from perfect competition and monopolies. Although firms in oligopolies have competitors, they do not face so much competition that they are price takers (as in perfect competition). Hence, they retain substantial control over the price they charge for their goods (characteristic of monopolies).
High intensity of rivalry can be expected among the numerous competitors of this industry. Most of the products have been around for a while now, so slow industry growth can occur with a lack of innovation. Augmented capacity can also become disruptive to the industry as economies of scale require that capacity must be added in large increments. Unless something is dramatically different, all of the weight management companies are competing for the same market
Rivalry among established firms is fierce. There are several factors that illustrate this: established market players (6.1). The product is highly standardized and the switching costs of the customers are low. Players are aggressive (6.2)
There are many items and services that we use every day. Some enhance our lives while other lead to stagnation. I chose a piece of fitness equipment due to my general interest in the item and my belief in its growing importance in the volatile fitness industry. I believe that despite the faddish nature of the fitness industry, kettle bells will only gain further popularity in the future. My conclusions are that kettlebells will become similar to barbells in the sense that it has stood the test of time as an effective fitness implement.
Difference Between Oligopoly and Monopolistic Competition An oligopoly market structure is one in which there are a few large producers who are present in the industry and account for most of the output in the industry, there are many small firms but few large. firms dominate and have concentrated market share. Whereas monopolistic competition is a market structure that has a large number of sellers, each of which is relatively small and posse a very small market share. Another feature of an oligopoly is that there are some barriers to entry and exit into the industry.
Monster Energy is an example of a monopolistic competition as described in a market structure where many sellers produce similar, but slightly differentiated products. Each producer can set its price and quantity without affecting the marketplace as a whole. A central feature of monopolistic competition is that products are differentiated.
Christopher Bidlack, an author of studies involving changes in the use of prosthetics in sports and contributor to sports law studies on Marquette University’s research website, feels that the reason this topic is relevant today is because the technology behind prosthetic limbs has evolved greatly, both in terms of design and materials. Because of this great jump in the quality of prosthetics, American sports entities will soon have to determine whether disabled athletes will be eligible to compete on prosthetic limbs(Bidlack). It is because of this approaching decision that many officials fear the change and outcome of either banning or allowing the use of prosthetics in the sports. Along with this “there is frustration among athletes, but also fears that a liberal approach to enhancements would prove controversial. Double amputees are increasingly running faster than single counterparts as neither leg tires and they can take longer strides, creating a potential incentive to have both removed”(Monks). Meaning that by allowing the use of prosthetic limbs in sports, a moral dilemma could arise regarding an encouraged amputation of both limbs in order to perform better in the sport. The safety of the other athlete is also a major concern for officials. With the design of these prosthetic limbs, officials find them to pose a possible safety hazard to other athletes on the field. One incident occurred when paralympic runner Blake Leeper’s prosthetic limb came off during the paralympic trials as he crossed the finish line(Rubinroit). Many saw this as dangerous to the other athletes on the track as it could possibly lead to their injury. It is clear to see that whether or not amputee athletes can participate in the sports sanctioned for able bodied athletes will pose problems for the future, but with regulations and changes to the
A Monopoly is a market structure characterised by one firm and many buyers, a lack of substitute products and barriers to entry (Pass et al. 2000). An oligopoly is a market structure characterised by few firms and many buyers, homogenous or differentiated products and also difficult market entry (Pass et al. 2000) an example of an oligopoly would be the fast food industry where there is a few firms such as McDonalds, Burger King and KFC that all compete for a greater market share.
A monopoly is “a single firm in control of both industry output and price” (Review of Market Structure, n.d.). It has a high entry and exit barrier and a perceived heterogeneous product. The firm is the sole provider of the product, substitutes for the product are limited, and high barriers are used to dissuade competitors and leads to a single firm being able to ...
If competitors offer equally attractive products and services, then one will most likely have little power in the situation, because suppliers and buyers will...