|
|
|
|
|
“Market Structures” Simulation
|
|
|
Market Structure Simulation - Quasar Computers Economic Strategy Team A Chris Ford Abdi Humphries Karen Kennedy Chris Shugart Irene Vela Facilitator: David Tucker July 30, 2003 “Market Structures” Simulation A) Over the course of a product life cycle, as the firm moves through the sequence of monopoly, oligopoly, monopolistic competition, and pure competition, the profit opportunities diminish. What strategies could the firm pursue to prolong its profitability? The recommended strategies to prolong the profitability in each of the phases are as follows: 1. In the Monopoly phase the company must aggressively defend its patent and keep the market in a monopoly as long as possible since this is the phase in which it will see maximum profits. Offering great value to the consumer at this point builds a strong brand that will be hard to match by the entrance of the first level of competitors. Even if consumers are paying a little higher price than with a soon-to-release competitor, they will accept this if they view it as a superior product. Another point that probably should be made is to invest in R&D-type activities to keep patents and other barriers to entry as high as possible. Use the monopoly profits to find new products and innovations that others do not have so as to keep the monopoly going. 2. In the Oligopoly phase, the company must tacitly cooperate with its competitor to maximize profit. Together, they should work to make entry by other competitors difficult by dominating suppliers, protecting their intellectual property, building brand loyalty, and furthering R&D advancements. However, the company must be careful not to violate anti-trust laws in this effort. Yes, this is important. Good point.Some ways of trying to stay ahead in the market: · Money back guarantees · Service calls at home for free with the purchase of an extended warranty · Offer upgrades at a discounted rate within a year of purchase to all buyers who purchase the notebook computers within the first year of business 3. In a change of structure to Monopolistic Competition, the key strategy is product differentiation. Introduction of the Ceres line with features specially designed for the printing industry will allow the product to stand out from the crowd and demand a higher price. The company should always be looking for that next opportunity to differentiate itself. They should be looking for that not only in MC, but also when they are actually a monopoly.
|
|
|
|
Still Can't Find What Your Looking For? Then Try a Essay Search!
|
