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Chapter Three.pptx

  2. LEARNING OUTCOME: To be able to describe and present the market opportunity for a new product or service in terms of its potential users, as well as its competing and complementary products and services.
  3. LEARNING OBJECTIVES: At the end of this chapter, the learner will be able to: 1. define the Market Structure; 2. know the types of market competition and its characteristics; and 3. analyze new product development stages and its strategies
  4. INTRODUCTION ◦ The definition of market structure is a method for providing hypotheses investigating market situations with some framework. Economists deposited the three most familiar elements of the market structure as the number, scale, and size of seller and buyer distribution, the degree of product differentiation, and the entry criteria into the market requirements for entry into the market. The "place of competition to the firm" is the setting or "market structure.” The nature of the market is the environment in which the business achieves competitive 'discipline' or in which the competition law is made effective. Therefore, one can assume that the relevant, a limited number of strategic environmental factors affecting al] fundamental choices are involved in the market structure. In the broader image of the company's setting, the definition of market structure is included.
  5. DEFINITION ◦ Market structure in economics explains how businesses are distinguished and categorized based on the types of products they offer and how external influences and components influence their operations. The system of the industry makes the features of diverse markets easier to grasp. ◦ The product type is a product category or product classification that offers a specific set of benefits intended to satisfy a customer's need or want in a particular way. Differences in products within a product-type (class) product-market may exist, creating product-variants.6 For example, they are electric, gas, and microwave ovens.
  6. The market climate can be perceived in three overlapping contexts: 1. The general setting or institutional climate (institutional environment) 2. The economic basic conditions (basic conditions) and 3. The unique setting that listens so directly to the company affects all significant decisions (market structure)
  8. PERFECT COMPETITION It is a market system where, at a uniform price, an infinitely large number of buyers and sellers compete freely and sell a homogeneous product. It has infinite contestability characteristics (no entry barriers), an unlimited number of manufacturers and customers, and a tremendous elastic demand curve.
  9. Characteristics of Perfect Competition: 1.High number of sellers and purchasers 2.Homogenous product 3.Free entry and exit 4.Perfect business awareness 5.Perfect mobility of factors of production
  10. MONOPOLY ◦It is the type of business organization in which a product for which there are no near replacements is a single seller.
  11. Characteristics of Monopoly: 1.A single seller 2.Products without an alternative 3.Restriction of entry for new firms 4.Price discrimination 5.Small customer option 6.Price above marginal cost
  12. MONOPOLISTIC COMPETITION ◦It refers to a market structure with a relatively large number of vendors selling similar but not identical goods. Monopolistic competition is when the market is competitive, but it has some monopoly features. In this type of business, several companies offer highly differentiated goods. A monopoly rivalry is thus a business system in which there is no coordination between the many sellers. Handheld appliances, cosmetics, detergents, forms of toothpaste, fast food restaurants, clothing stores, etc., are examples of this industry category.
  13. Characteristics of Monopolistic Competition: 1.Market segmentation 2.Many buyers and sellers 3.Reduced likelihood of minimizing cost 4.Price setters
  14. OLIGOPOLY ◦ The word Oligopoly refers to 'Few Sellers.' Few Sellers' refers to the term Oligopoly. An Oligopoly is an industry that consists of only a few businesses or a small number of large companies producing all of its production. In other words, oligopoly exits are dominated by a market where few large corporations manufacture a homogeneous or differentiated product. Since the sector consists of either a few companies or a few large companies, any adjustment in prices and production by an individual company is likely to affect rival companies' profits and output. As an instance of Oligopoly, the car and oil industry, big soft drink companies, airlines, and milk companies can be cited.
  15. Characteristics of Oligopoly: 1. Few companies 2. Interdependence 3. Obstacles to entry on firms 4. Non market rivalry 5. Advertising dependency 6. Uncertainty of demand 7. Product differentiation 8. Sticky prices