Essay on Southwest Airlines: Organizational Culture

Essay on Southwest Airlines: Organizational Culture

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Perfect competition is a very rare type of market and so competitive that it negates the impact any one buyer or seller could have on the market price. The products or services sold are exactly the same and are all the same price. Firms earn only a normal profit and in the event firms started to earn more than that, other firms will enter the market and drive the price level down until only a normal profit could be made. Even the technology used is the same throughout all the companies.
Monopoly is a sole player and a single monopoly is seen as one organization that holds 100% of a certain market share. A monopoly produces less at a higher price and decides the price of its good/service by calculating the quantity of output so that its marginal revenue would equal its marginal cost. Afterwards the monopoly would then sell its good/service at whatever price would allow it to sell exactly that quantity.
In practice monopolies are not absolute; they are usually constrained by competing. A case of this occurs when a single firm dominates a certain market, but has no pricing power because it is in a Contestable Market, “a market in which an inefficient firm, or one earning excess profits, is likely to be driven out by a more efficient or less profitable rival.” (
Oligopoly is when a few select firms dominate a select market. In this situation there are only a few producers but many buyers, and the action of one producer will affect the influences of other producers. ( when this happens the producers can’t decide on a price like a monopoly can and they often turn into competitors. When they do compete on price, they may produce as much and ch...

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...a product or service. Just by looking at Easy Jet, you can see that competition has an affect and for them to keep their customer base they have to cut costs so demand for the service will still be there. If they don't cut flight costs then they may lose the demand to rival budget airlines. The increase in Air Passenger Duty Tax and landing charge increases also affect the company and so therefore affect customers.
Competitive advantage - to get an edge over your rivals you must adopt cost leadership strategy (producing at a lower cost), differentiation strategy (these may be color or size differences or alternatives for different market segments) and focus strategy (concentrate on different market segments).

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