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Manufacturing Industry Evaluation - Essay Example

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The level of competition for Women’s and girl’s cut & sew dresses has been high since the late 1990s, because of the removal of the trade agreement that protected this industry against the threats of importation. Consequently, many small firms could not survive this…
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Manufacturing Industry Evaluation
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Manufacturing Industry Evaluation

Download file to see previous pages... As a result, the larger firms keep acquiring other small firms as they continue dominating in the markets, effectively reducing competition in this industry (Lynn, 2002). The Envelope industry is such other industry of the US that has low competition. The larger firms control most of the US markets for this industry.
Oligopoly refers to a market condition, where the market has many buyers and very few sellers. In an oligopolistic market, just a few firms, mostly the larger ones, dominate the market (Elmer, 1999). Since there are few sellers in such a market, every firm operating in that market has the chances of knowing the moves and the trends that the other firms are making in order to achieve a competitive advantage in the market. Consequently, the firms operating in an oligopolistic market conditions are most likely going to make their decisions based on those decisions made by other firms. Thus, in an oligopolistic market, the decision made by one firm affects the other firms and vice versa (Case, Fair, and Oster, 2009). The characteristic oligopoly market involves the firms producing and selling their products at the quantities and prices they feel are suitable to grant them the profit margin they require. Thus, oligopolies set the market prices for their products, other than selling their products at the existing market prices (Elmer, 1999). In the US, the Envelopes and the Fluid Milk industries qualify as oligopolies.
The Fluid milk industry in the US is an example of an oligopolistic market condition, where the market in the industry is dominated by few firms. The dairy cooperative of the country called the Dairy Farmers of America have effectively established close alliances with the other players in the industry, notably the Dairy Market services, which has on its side collaborated with the US major milk manufacturers (Lynn, 2002). This ...Download file to see next pagesRead More
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