Global Competitive Environment - Assignment

Global Competitive
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The Oligopoly market is described as those market conditions where there are few sellers
who are selling differentiated or homogeneous goods. The firms who are selling their products
are having large market shares. The oligopoly market is similar to those of monopoly market and
in that case only one firm is selling their products (Algesheimer, Dholakia and Gurău, 2011). In
this market there is no limit on the number of sellers who will be selling goods at market place
but the number of firms operating should be low that the actions of one business are having
impact on others business operations.
1) Characteristics of Oligopoly Market
Few Sellers: There are less sellers but customers are large in number who are selling
products. As the market place is dominated by few sellers so they are having total; control over
the prices of products which they are selling to their customers.
Interdependence: This is most vital feature of Oligopoly market as the sellers have to
focused on the pricing strategy which are adopted by other rivalry. There is high competition
among the sellers because if one firm change the price of their products then other firms are
having high impact from their pricing strategy and they had to implement different price
strategy. Thus there is high interdependence among the sellers in relation to price of products.
Advertising: Under the situation of Oligopoly market each firm are giving advertisement
of their goods on regular basis as it is beneficial for them in order to attract customers who will
enhance their overall sales and profitability ratios. This is an important factor for firms because if
they are not spending money on advertisement then it will not result in attracting customers and
they will buy products from their rivalry firms. So firms wants to win the race so they are
spending large amount of money on advertisements of products (Benton and Redclift, 2013).
Competition: There is higher competition at market place because there are only few
sellers who are selling their products and there are large number of buyers. If there is any action
taken by one firms then it will have impact on their rivalry business. Thus each seller is keeping
their eyes on rivalry firms and they are ever ready for the counter attack.
Entry and exit barriers: The firms who wish to enter into oligopoly market can easily
take entry but they had to face some barriers which taking entry. The restrictions can be related
to Licensing policy which are adopted by government, economies of scales, large capital
requirement, new and innovative use of technologies etc. There can be case at time when
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