Market Models - Intel Corporation - Assignment Example

The number of players in the semiconductor chip-making industry is relatively high, making it necessary for Intel to be as competitive as possible. Although there are numerous firms in the semiconductor chip-making business line, their products are differentiated by some firm-specific variables that create substitutability in the market. On the same note, each firm adopts its own pricing policies, thereby practicing independence from the others. However, Intel Corporation and all other firms in this market model cannot compete on a price basis. Rather, intensive advertising is a prominently employed competition strategy (Taylor & Weerapana, 2009).

Market share in monopolistic competition is accessed by all operating firms. The substitutability of products makes the firm become price cautious, although they cannot necessarily compete on a price basis. Firms can also enter and leave the market relatively easily, making new entrants pose operational threats to existing firms in terms of competition. Technological improvements make it possible for Intel to come up with new and improved product brands, but this does not rule out the fact that rival firms could be doing the same and that new entrants could do it even better in the monopolistic competition market model. Read More