Monopoly in Business - Research Paper Example

An Analysis of Monopoly in Business Many investors both in the private and in the public sector have at one point enjoyed the monopoly in running their businesses activities. Frequently, such firms can enjoy a free competitive business environment and therefore enjoying profit maximization and increased growth for their businesses. Due to increased economic growth globally, many firms have taken the opportunities in the global markets to sell their goods and services. Through numerous improved global infrastructures, firms have an opportunity to produce more goods and services as well as establish links for distribution of goods and services. In this essay paper, a closer look at impacts of monopoly in businesses is evaluated. Additionally the paper also reflects on the numerous roles of such a business and its negative impacts to the economy. Business environment for monopolist Due to the current global concerns on the environment, many firms have turned to investment that advocate for a green economy. Through such initiatives, many firms have identified different business opportunities that promote such an initiative. At the same time, this has remained an area of just a few people including the early innovators who have ventured into upbringing of new ideas in business. Mostly, many of the existing firms in the automotive industry, for instance, have ignored such opportunities due to the lack assured markets if such products were manufactured. But for such a field, this continues to provide opportunities for many firms with interest to venture into an area that remains dormant, especially if the firm can provide products that prove to be unique. Impacts of monopoly in business The concept monopoly in business has constantly drawn a lot of concerns among investors in both the public and the private sector. The consumers have also not been left out as they continue to carry the burden of inflated prices for goods and services from the monopolist. Through out the United States, for instance, many monotonous firms have frequently taken advantage of being singled out in the business competitive market. In such a case, many of these businesses have turned their investments into a huge business empire (Rugman & DCruz p.87). At the same time, many of this business have as well taken advantage of the consumers who are left with no options but to rely on the products manufactured by only one firm. In such a market, the consumers have severally raised their concerns on exploitation by such firms due to inflated prices. Due to these reasons investing in such firm would require research to be carried in order to identify key areas of concerns by the consumer. Consumer research is necessary before such an investment. By understanding the consumers needs, investment in the carbon-free market would thrive as major concern would be the consumers. Additionally, when the consumer is kept in mind, the production process should be based on the consumer concerns. The objectives of the firm cannot also be ignored in such an investment as this would be the major reason for the firm existence. By a firm becoming monotonous, especially in the manufacturing carbon dioxide free cars, this opens up the idea of being innovative in the production process. Firms should consider adopting numerous technologies that would facilitate the implementation process for such an objective. The human resource is also vital as such an investment is not diverse among many nations globally. The firm should, therefore, ensure the personnel working the production section are highly trained and meet the right criteria to work in the production process of the firm. Regulating the concept of monopoly in business The regulation of monopolist is imperative for a friendly business environment. Considering the fact that many of such business are singled out in competition, the government ought to take measures in regulating the existence of such businesses. Considering that the end consumer is the one who ends up suffering, the drastic measures should be taken, especially in controlling prices of products manufactured by such firms. Such firm the public sectors can also be regulated by the adoption of new policies that addresses the production processes of such firms but as well as the marketing concepts for such firms. By putting regulatory measures for such firms, this would create a fair environment for other business in similar investments. Similarly, the end users would benefit with regulated prices that remain constant rather than an uncontrolled prices that keep on changing for the benefit of the monotonous firm (Besako et al. p.162). The regulation process can be initiated by firms in the private sector, the end users or the government. Through numerous negative impacts of a monopolist in business, the proper measure should be put into consideration to frequently minimize the emergence of such businesses, but as well regulate the existing businesses. If more of such businesses are encouraged, this would have a huge impact towards the economy as these firms would dictate the prices for certain products. To reduce such cases, the government may decide to impose a price cap for monopolist products in order to protect the consumer. By encouraging an open market for investment, this would encourage the investment of different sectors by willing investors and therefore reducing chances for the monopolist. Critical review on Monopoly The monopolist is a company that deals with production of goods that at one-point lack substitute for similar products, in such an industry manipulated by the monopolist may be regarded as monopoly. Government interventions in controlling monopolist in the business industry play an important role in balancing the demand and the supply of goods and services (Williamson p.76). At the same time, these reduce cases of price discrimination in numerous industries. In a situation where the government gives full rights a monopolist to produce goods and services, this would encourage monopolies in different sectors that would escalate inequalities especially on the prices for goods. Concurrently, many monopolists also have continued to dictate on the kind of products to avail the less competitive market. In this case, many of these firms have compromised the quality of goods and service availed in the market. Due to lack of substitute products from other existing firms, the control of what to produce, how to present the product and at how much, has remained a strong decision of the monopolist. This has left the consumer, with the fragment of low-quality goods and at the mercy of the monopolist. Major monopolists in the United States have also improved on the balance of economy of scale by producing more goods in bulk, therefore cutting the cost of production. Through such the company can cut cost on the production of one unit of their products. Through such, many monopolists enjoy profit maximization for their products, and they benefit from, but as well as inflate their prices that ends up oppressing the end user. Through numerous changes in the business environment, the consumer had continued to demand more quality and better services. Incidentally, monopolist have ignored such consumer needs and change of behavior due to the increased demand for goods availed by the monopolist. On the other hand, individuals that are willing to invest in closely related business have continued to experience a lot of resistance from monopolist that do not want share profit. Major sectors globally such as the transportation sectors, mining, and generation of energy have remained an area controlled by the public sector. In many countries, areas such the rail sector is controlled by Government Corporation, limiting the private sectors from investing in such sectors that requires the availability of public land due to the magnitude of such a project, especially on the infrastructure. Many economists have continued to argue about the impacts of monopolist toward the economic development of a country. Though there might be many disadvantages of the monopolist in the field of business. There are cases that economist believe that due to monopolist the economy benefits directly. Through mass production, for instance, many of the consumers have been able to benefit directly from enough surplus of goods. This also has balanced trade between the buyer and the seller as both can satisfy their need. Through government regulations, monopolists in the private sector have also adopted better policies in the marketing strategies, therefore reducing cases of consumer exploitation. There are also increased expectations by the consumers as they strongly continue to demand better services from the suppliers of goods and services (Boddy et al. p.195) CONCLUSION Globalization has played a significant role in opening markets for international goods and services. At the same time, the emergence of monopolist continues to pose a threat to the consumers as their provision of goods fails to allow fair competition in the market. But at the same time the customer is left with no option but to rely on the monopolist especially if the needed cannot be accessed from somewhere else. Works Cited Besanko, D, Dranove, D, and Shanley, M. (2000) Economics of Strategy, ch. 2. Second Edition. Wiley & Sons Inc, USA Boddy, D, Macbeth, D, and Wagner, B. Implementing Cooperative Strategy: A Model from the Private Sector. In: David O Faulkner and Mark de Rond (Eds) . Cooperative Strategy: Economic, Business and Organisational Issues, Oxford University Press, New York, p. 195. 2000. Print. Rugman, AM and DCruz, JR. The Theory of the Flagship Firm in Cooperative Strategy. In: David O Faulkner and Mark de Rond (Eds). Cooperative Strategy: Economic, Business and Organisational Issues, Oxford University Press, New York, pp. 58-61. 2000. Print. Williamson, OE. The Mechanisms of Governance, pp. 84, 369. Oxford University Press, Oxford. 1996. Print. Read More