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Strategy and Market Structures

Strategy and Market Structures. Strategies for Everyone. Market Structures. An Economic Concept Perfect Competition Monopolistic Competition Oligopoly Monopoly. Marketing Mix 4 P’s of Marketing. Product Place Price Promotion. Product. What we sell

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Strategy and Market Structures

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  1. StrategyandMarket Structures Strategies for Everyone

  2. Market Structures • An Economic Concept • Perfect Competition • Monopolistic Competition • Oligopoly • Monopoly

  3. Marketing Mix4 P’s of Marketing • Product • Place • Price • Promotion

  4. Product • What we sell • Is it like other company’s products? • Is it unique • Do we try to make it better?

  5. Place • Where do we sell our product? • How do we get it there?

  6. Price • What price do we put on our product? • Do we offer discounts? • What pricing strategy do we use?

  7. Promotion • Do we advertise? • To whom? • For what purpose? • Other types of promotion.

  8. MonopolyCharacteristics • Single Firm Serving an Industry • Barriers to Entry Keep Competitors Out • Has Market Power • Examples • Electric Utility

  9. MonopolyStrategies • Product - Innovate • Place - Important • Price - Important • Promotion • To Gain New Customers • As Opposed to Stealing Customers • To Influence Public Opinion • Other • Limit Entry by Competitors

  10. MonopolyGroup Exercise • Identify a Monopoly • Develop a Strategy for that Company • Product • Place • Pricing • Promotion • Other

  11. Perfect CompetitionCharacteristics • Many Small Firms • Price Takers • No Economic Profits • No Barriers To Entry/Exit • Example • Small Farms

  12. Perfect CompetitionStrategies • Product – Fixed • Place – Not Important • Price – Cannot Influence • Promotion – Not Important • Other • Maximize Short Run Profits By: • Optimum Output Level

  13. Perfect CompetitionGroup Exercise • Identify a Company in Perfect Competition • Develop a Strategy for that Company • Product • Place • Pricing • Promotion • Other

  14. MonopolisticCompetitionCharacteristics • Like Monopoly in the Short Run • Like Competition in the Long Run • Few Barriers to Entry • Competitors Steal Your Ideas • Product Differentiation is Key • Examples • Most Small to Medium Sized Firms

  15. Monopolistic CompetitionStrategies • Product - Differentiation Important • Maintains Monopoly Profits • Place • Price – Important • Promotion – Important • Other • Competitors - Unimportant

  16. Monopolistic CompetitionGroup Exercise • Identify a Company in Monopolistic Competition • Develop a Strategy for that Company • Product • Place • Pricing • Promotion • Other

  17. OligopolyCharacteristics • Few Competitors • Able to Observe the Competition • Like a Game Among Competitors • Barriers to Entry Often High • Examples • Many Large Companies • Airlines • Auto Manufacturers

  18. OligopolyStrategies • Product – Important (Innovation, Differentiation) • Place – Important (Depends on Competitors • Pricing Strategy – Important • Promotion • Take Business from Competitors • Get New Customers

  19. Group ExerciseOligopoly • Identify an Oligopoly • Develop a Strategy for that Company • Product • Place • Pricing • Promotion • Other

  20. Wrapping It Up • What Have We Learned? • Questions? • How does this discussion apply to CAPSIM?

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