Recent industry analyses typically have strong relation with economic
theories. There is a theory, belongs to microeconomics, divides
industries into categories according t the degree of competition that
exists between the firms within the industry, i.e. the theory of
Alternative Market Structures.
This essay based on three questions divides into 3 parts to explain
and evaluate the questions.
This essay (PART A) outlines the main categories of market structures,
and shows the theoretical features of two of them, i.e. Perfect
Competition and Oligopoly.
This essay (PART B) evaluates upon the most relevant structure in
regard to the UK supermarket industry.
This essay (PART C) shows the implications for the UK supermarket
industry of the Morrison to take over Safeway.
Additionally, in this essay, the spread conclusions of three parts are
in their finalities that would be instead of the conclusion in the end
of the whole essay.
Markets can be described in relation to their different levels of
competitiveness. The different market structures are perfect
competition, monopoly, oligopoly and monopolistic. For an overview of
each structure's comparative characteristics.
In this essay, it analyzes the two of them: Perfect Competition and
Perfect Competition is the most competitive kind of market structure.
It is considered as an ideal form of economic organization for
providing goods and services to consumers as efficiently as possible.
Its characteristics are classified as follows:
1. There are many firms in the industry, thus an individual firm's
contribution to total industry supply is so small that whether...
... middle of paper ...
...ucture by the acquisition, that means the market will be made even
harder for new shops, especially the small firms who may not have
abilities to compete, offering a new shopping experience to enter the
market. Because of the barriers, it causes some limitation on the
As above mentioned, the Competition CommissionÂ’s decision of
acquisition by Morrisons of Safeway motivates the UK supermarket
industry to be more monopolistic while maintaining the scope of
competitiveness. Of course, there are a few potential problems that
might express in next few years, when the competition is gradually
reducing and balancing.
 Source by Sloman & Sutcliffe, Economics for Business, 1998
 Source by IDC data, 2003
 Source by Competition Commission, 2004
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