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Economics for Business- Retail Company Coles

   

Added on  2020-10-23

9 Pages2603 Words136 Views
Economics for Business-Retail company Coles

Table of Contents2. Analysis of market structure of Coles supermarket.................................................................13. Determinants of demand and supply........................................................................................34. Demand elasticity of products of Coles supermarket..............................................................55. Impact of recent event on the retail industry...........................................................................6REFERENCES................................................................................................................................7

2. Analysis of market structure of Coles supermarketMarket structure: It can be defined as characteristic of market that affect nature ofpricing and competition. Market structure is the degree of competition available in industry forproducts and services that are sold by business entities. There are various types of marketstructures such as oligopoly, monopoly, perfect competition and monopolistic competition. InAustralia business entities that are operating under retail sector are using aggressive pricediscounting strategies in order capture larger market share. Organisations are collaborating forthe purpose of decreasing competition in supermarkets. In Australia retail sector has oligopolystructure which means there are only a few firms in the market (Market structure of Coles,2019). Coles is a part of supermarket industry of Australis hence its market structure isoligopoly. Price for the products is set according to market influence in order to enhanceprofitability under this structure (Ahsan and Rahman, 2016). It lies between pure monopoly andmonopolistic competition where a few number of sellers dominate the market and take controlover price of goods and services. Interdependency is the main characteristic of such type ofstructure in which firm formulate decisions by taking potential reaction of closet rivals in toconsideration. Coles in oligopoly market structure because there are few players in retail sectorof Australia which results in intense competition. If one action is taking by its rival then it canaffect sales and profits of the organisation, so it keeps eye on all the activities of other companiesthat are operating under same sector. This situation takes place due to lack of uniformity amongthe firms in the form of size. Advertising is done on intense basis by Coles and its competitorsuch as Woolworths in order to reach maximum number of clients which results in intensecompetitive rivalry in the industry. A company with oligopoly market structure does not spendfunds on advertising or promotional activities then customers get attracted towards other playersin market. Thus, it is vital for all enterprises to take initiatives in such type of activities in orderto remain competitive in the market.Major players in the industry are Coles and Woolworths that are mainly from Australiaand there are some other companies that are giving tough competition to them. These are Costcoof United States and Aldi from Germany. Both the foreign companies are expanding business inin Australia aggressively. Homogeneous or differentiated products are sold by such type oforganisations which are operating business under oligopoly market (Havinga, 2015).Statistics of major players:1

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