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IMPERFECT COMPETITION - Essay Example

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There exist numerous market structures in the business world and each structure has its own distinctive features. Essentially, it is imperative to consider the…
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IMPERFECT COMPETITION
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Imperfect competition Introduction The nature of the market structure is quite influential on the nature of the product or services offered by a firm. There exist numerous market structures in the business world and each structure has its own distinctive features. Essentially, it is imperative to consider the type of market structure before establishing a business enterprise. According to Ahlstrom & Bruton (2010), some earlier studies reveal that some business portray constant dismal performance due to ignorance of the proprietors/entrepreneurs on matters concerning market structures. Imperfect competition is one of the types of market structures that exists in the business field. Generally, an imperfect competition market can be described as a market setting where the products sold are highly differentiated. In essence, in order to survive in an imperfect market, a firm has to develop unique survival techniques to avoid suffering losses and losing customers loyalty.
Nature of the market
Apparently, the fast food industry has become quite competitive in the modern times (Schlosser, 2012). In response to the increased competition, firms operating in fast foods industry have come up with distinguished survival strategies to enhance continuity in business. Some of the survival techniques that have been adopted by firms in the fast food industry include product differentiation, brand building and diversity in product promotion. In this regard, it can be observed that the tropical Smoothie Café operates in an imperfect competition market. The price of products offered in an imperfect competition has insignificant influence on demand. Basically, customers in an imperfective competition market are more sensitive on product brand than price. Tropical Smoothie Café has established unique marketing strategies that are rarely known by its competitors. Some of the major competitors of the firm include McDonalds, Starbucks and Burger King.
Ways to promote marker power
Since the firm operates in an imperfect competition market, the most appropriate means of achieving market power is through establishment of a strong brand name (Manning, 2013). In essence, a strong brand name aids in winning customers loyalty and maintaining them for long. Actually, the firm should emphasis on brand imaging through advertisements and product promotion. In addition, the company should consider offering discounts to its customers to promote sales as well as customer loyalty.
Expiry of Patent license
The government efforts to regulate business operation can either result in positive or negative outcome to a business concern. The issues of patent rights and copyright authentication have been quite controversial in modern business world. Apparently, special patent license should never expire since doing so might result in adverse consequence in the future development of the enterprise (Mittal, 2011). Moreover, expiration of the patent license will affect the operation of the company since it will terminate the legal rights of operating the business under the company’s name. Therefore, the patent license for the enterprise should never be revoked or expire to enhance confidence when executing duties in the industry.
Conclusion
Business enterprises are usually faced by the challenge of competition in their daily operation. Therefore, it is important to devise unique mechanisms of surviving in the industry despite the stiff competition. Firms should invest substantial resources and time to research the nature of the market and the needs of the target customer. Research would facilitate development of products that are favored by customers and thereby boost profitability.
References:
Ahlstrom, D., & Bruton, G. D. (2010). International management: Strategy and culture in the emerging world. Australia: South-Western Cengage Learning.
Manning, A. (2013). Monopsony in Motion: Imperfect Competition in Labor Markets. Princeton University Press.
Mittal, R. (2011). Licensing intellectual property: Law & management. New Delhi: Satyam Law International.
Schlosser, E. (2012). Fast food nation: The dark side of the all-American meal. Boston: Mariner Books/Houghton Mifflin Harcourt. Read More
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