differentiating between market structures - 275 Words

differentiating between market structures (Essay Sample) Content: Differentiating Between Market Structures Name: Institution: Differentiating Between Market Structures One of the famous companies that are known for quality products and services is Kudler Fine Foods. The company focuses on customers. Kudler Fine Foods has ensured a higher customer satisfaction since its opening. Presently, the company has three stores in California State. The company also aspires to expand in the future. Lately, Kudler Fine Foods has adopted flourishing marketing strategies that have raised the company's profits and, therefore, placed it in a higher profit margin. The company first informs its customers about the availability and quality of the products before they purchase them. This shows the high degree at which Kudler Fine Foods prioritizes on customer satisfaction. The vision Kudler Fine Foods is to be the premiere gourmet grocery store for those shoppers that value best produce, meat, wine (Apollo Group, 2013). The owner of Kudler Fine Foods considers the company as one that operates in an industry where there is no direct competition. This paper discusse s about Kudler Fine Foods in respect to the market structure in which it operates, why the market structure was decided upon, how the market structure differentiates from other alternatives, how Kudler Fine Foods finds itself working with organizations that are an oligopoly, monopoly, perfect competition or monopolistic market structure. The paper also examines the different sectors within the industry, and how market structure may vary within those sectors, identifies three competitive plans that may be used by the firm to increase its profits over the long run, evaluates the efficacy of the strategies in the identified market structure, and finally offers recommendations in relation to the strategies that the firm might consider in order to maximize its profits. Market structure Kudler Fine Foods operates in a monopolistic market structure. This structure consists of several companies that sell slightly different products. Kudler has differentiated products (Colander, 2010). The reason this market structure was decided upon is because it can act independently as well as adapt to economic trends while meeting consumer preferences. This differentiates the Kudler fine foods from its competitors. Kudler Fine Foods enjoys a monopolistic competitive advantage through marketing strategies and product differentiation (Apollo Group, 2013). Also, another reason this structure was decided upon is based on barriers to market entry. In respect to Kudler Fine Foods, there are low barriers to market entry. The reason is that establishing a gourmet grocery store is easy compared to other businesses. The monopolistic market structure differs from oligopoly in that oligopoly is dominated by few large farms, many barriers to entry, and identical or differentiated products. In regard to monopoly, there is no competition in the market as a firm is always the only seller in the market. The structure has a full market control. The perfect competition market structure has no market control, and no firm influences the market price. Also, the structure consists of a large number of small firms and firms have the freedom to enter and exit the market. Kudler Fine Foods belongs to a saturated industry. This means that the firm has to work with other organizations that may have different market structures. In order to work with monopolistic organizations, Kudler Fine Foods ensures that though similar products are produced, the branding is not the same. This ensures that Kudler customers go for the products they are familiar with. For oligopoly organizations, few firms dominate the market. This means that only few large firms compete with Kudler. Since these market structures have a high concentration in the marketplace, a company like Kudler still operates and succeeds behind these companies. Its products still attract consumers in the same market place. Kudler Fine Foods is also able to work with organizations with monopoly market structure because such organizations have difficulties in entering the market (Colander, 2010). This is due to high costs or other barriers. Therefore, Kudler can enter the markets easily than such orga nizations. Kudler works with organizations that have perfect competition market structure in that since there are no barriers to entry, there is perfect information to all participants and also, firms produce identical products. Kudler's products are still recognized in the market in that they provide information to customers. Its market structure has low barriers to entry and also ensures that its products are differentiated. There are three major different sectors within the grocery industry. These are the supermarket, wholesale and retail sectors. These sectors have different market structures. The supermarket sector operates within the oligopoly market structure where there are few large firms (Colander, 2010). Here, though there are large barriers to market entry, these few large farms are highly competitive and therefore each supermarket competes to supply and sell its products. Also, it offers self-services. For the retail sector, it operates within the perfect competition market structure where there are few small firms, no market price control and low barriers to entry (Colander, 2010). As such, this sector flourishes more than others, and many groceries are sold. The third sector is the wholesale sector which operates within the monopolistic competition market structure. Due to low barriers to entry, this sector is highly concentrated. The reason this sector has succeeded is that it is based on the structure's ability to offer differentiated products that favor more customers as well as the ability to inform the customers on the nature of the grocery products. Kudler's competitive strategies have enabled it to maximize its profits. In order to grow its business, Kudler implemented the product differentiation strategy (Apollo Group, 2013). This strategy enables the firm to invest progressively in creating new products as well as rebranding the existing ones. As such, customers believe that products from Kudler are quite different from competitors' products. This makes Kudler superior to its competitors. It also experiences a large number of customers and therefore increases in profits. In addition, Kudler offers complementary services to customers such as home delivery after shopping. Another competitive strategy of Kudler is educating customers on the nature of products before purchase. Currently, Americans are more health conscious than before and therefore careful of everything they consume. Kudler has taken this advantage by informing customers on the availability and quality of products in their stores (Apollo Group, 2013). Kudler puts easy-to-read labels on foods that are low in fat, high in prote...