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Project Part 3: Market Structure, Strategic Behavior, and Market Power - Research Paper Example

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McDonald Company is a business enterprise that deals with a chain of restaurants, which are either operated by the company itself or by individuals outside the company’s management and who pay rent and other fees to the company in order to be allowed to use the company’s…
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Project Part 3: Market Structure, Strategic Behavior, and Market Power
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Download file to see previous pages Market conditions refer to the factors that influence the sale of a commodity in a certain area (Krier, 2005). These factors determine the ability of a business to compete especially when introducing new commodities in the market. Such factors include and not limited to number of competitors already in the market, the level of competition as well as market growth rate. It would be difficult for a business to be able to capture huge market share at the first entry based on the fact that it takes time to form a strong foundation for coping with other competitors especially those which may have already acquired market power. Market power is the ability of a business to capitalize on its uniqueness and low competition on its products by taking control of the market prices as well as supply without compromising customer loyalty (Krier, 2005). The customer loyalty may be due to lack of a better option as a result of monotony in the supply of their requirements.
McDonald Company has been able to acquire a significant market for their products, which has given it an upper hand in the sale and distribution of quality food with the help of their franchisees, who owns at least 60% of MacDonald’s restaurants (Love, 2005). The company has maintained its market strength by developing products which fit the needs of its customers especially due to the fact that some of the customers are keen on maintaining their health as well as weight by avoiding some types of food (Love, 2005). To check on this, the company has embarked on a strategy aimed at increasing sales through the extension of available menus as well as its working hours in all its subsidiaries, which has helped in attracting more customers as well as maintaining the already existing ones.
Though the company has been able to acquire global recognition due to the long experience in the market, there are also other players for example the Burger king company, which offers the same ...Download file to see next pagesRead More
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