Market Strategy Case Study: Katrina's Candies
Based on the assigned scenario for Katrina’s Candies, assume that now there is a significant degree of interdependence among rival firms in the candy producing market. Please respond to the following questions.
a.) What market structures will Katrina’s Candies operate if the above condition prevails? I think Katrina's Candies would be successful operating in an Oligopolistic Structure. Oligopoly is a market structure characterized by a small number of relatively large firms that dominate an industry. The market can be dominated by as few as two firms or as many as twenty, and still be considered oligopoly. With fewer than two firms, the industry is monopoly. As the number of firms increase (but with no exact number) oligopoly becomes monopolistic competition.
Because an oligopolistic firm is relatively large compared to the overall market, it has a substantial degree of market control. It does not have the total control over the supply side as exhibited by monopoly, but its capital is significantly greater than that of a monopolistically competitive firm.
The three most important characteristics of oligopoly are: (1) an industry dominated by a small number of large firms, (2) firms sell either identical or differentiated products, and (3) the industry has significant barriers to entry.
Oligopoly is the one most likely to develop the innovations that advance the level of technology, expand production capabilities, promote economic growth, and lead to higher living standards. Oligopoly has both the motive and the opportunity to pursue innovation. Motive comes from interdependent competition and opportunity arises from access to abundant resources.
What pricing strategy for Katrina’s would you recommend under the above market structure? (Please make sure to discuss the importance of predicting the pricing strategies of the rival firms.)
b.) I think Katrina should look into Game Theory for their price strategy. Game theory is a method of analyzing situations
a.) What market structures will Katrina’s Candies operate if the above condition prevails? I think Katrina's Candies would be successful operating in an Oligopolistic Structure. Oligopoly is a market structure characterized by a small number of relatively large firms that dominate an industry. The market can be dominated by as few as two firms or as many as twenty, and still be considered oligopoly. With fewer than two firms, the industry is monopoly. As the number of firms increase (but with no exact number) oligopoly becomes monopolistic competition.
Because an oligopolistic firm is relatively large compared to the overall market, it has a substantial degree of market control. It does not have the total control over the supply side as exhibited by monopoly, but its capital is significantly greater than that of a monopolistically competitive firm.
The three most important characteristics of oligopoly are: (1) an industry dominated by a small number of large firms, (2) firms sell either identical or differentiated products, and (3) the industry has significant barriers to entry.
Oligopoly is the one most likely to develop the innovations that advance the level of technology, expand production capabilities, promote economic growth, and lead to higher living standards. Oligopoly has both the motive and the opportunity to pursue innovation. Motive comes from interdependent competition and opportunity arises from access to abundant resources.
What pricing strategy for Katrina’s would you recommend under the above market structure? (Please make sure to discuss the importance of predicting the pricing strategies of the rival firms.)
b.) I think Katrina should look into Game Theory for their price strategy. Game theory is a method of analyzing situations