Economics-Market Power, Oligopoly, Monopoly Essay

Economics-Market Power, Oligopoly, Monopoly - Essay Example Depending on the premise and circumstances of the discussion it can be reasonable to argue that competition is socially harmful as compared to market power. However, the argument against competition is very weak since empirical evidence and data shows the competition has more economic benefits and support for the development of the market than a single firm holding and dominating market power over an industry. This is because there are several benefits which can be gained from having some competition in a market. For instance, competition may force prices to go down for the consumer if a lower cost producer competes in the market. Additionally, a better product might be entered into the market with actually superior or perceived superior quality. The combination of these two factors can create products which are innovative, desirable and can cause the emergence of brands within an industry. At the same time, competition may be unnecessary or wasteful if the product differentiation is very low. For instance, the battle between Coke and Pepsi for market share seems to be wasteful since the products they are marketing are very similar to begin with. However, advertising can be socially effective when the products are dissimilar and offer different benefits as in the case of computer operating systems like the ones created by Apple, Microsoft and Linux.

Week #3 Learning Activity Essay Example | Topics and Well Written Essays - 250 words

Week #3 Learning Activity - Essay Example Large companies can tap an international labor force who can offer distinct local knowledge, competencies, and networks, and any other form of local and national advantages (Cullen and Parboteeah 265). Large companies also have recognized worldwide brands that do not need much marketing push. As a result, small businesses have to rely on firsthand research or secondary researches that are free, but not comprehensive or intensive, to design simple marketing strategies that they can afford. Small businesses have to invest on marketing strategies or tactics to improve brand awareness and brand loyalty for their businesses. Owners usually act as researchers too, in order to save money, while ensuring competitiveness: â€Å"The better a small business understands its customers, the better off it will be† (Chapter 6: Marketing Basics 21). The trend of the barrier is getting more intense in time as large companies merge or acquire other smaller companies (Cullen and Parboteeah 265). Internationalization is a strategic move that many large companies are taking advantage of which improves their brand equity across international markets (Cullen and Parboteeah 265). Small businesses do not need to match the marketing strategies and expenses of their large competitors, but scale down marketing research to fit the marketing mix that they can meet the expense of (Chapter 6: Marketing Basics 11). This way, small businesses can understand their strengths and use them to optimize market opportunities and to reduce market threats, especially competition from large