It has been said that the UK supermarket sector is an oligopoly Essay

It has been said that the UK supermarket sector is an oligopoly - Essay Example ...................................... Conclusion............................................................................................................ References It has been said that the UK supermarket sector is an oligopoly Introduction The UK supermarket sector is most definitely properly defined as an oligopoly based on the market structure that guides its business principles, the relevance of the consumer in building business strategy, the level of interdependence between competing supermarket companies, and the sector’s influence in pricing and supply within its market. An oligopoly is defined as â€Å"a market dominated by a small number of participants who are able to collectively exert control over supply and market prices† (investorwords.com, 2011, p.1). It is the interdependency between the few firms, such as Morrison’s and Aldi, that makes this market sector an oligopoly in relation to marketing efforts and pricing structures that drive strateg ic intentions. This paper describes the market characteristics of the supermarket sector in the UK that label these businesses as part of an oligopoly. The market structure All of the major supermarket competitors in the UK maintain a high degree of market share in the foods industry and are affected little by smaller competitors in terms of profitability. An oligopoly is able to affect the market by maintaining this high market share and control by being able to influence pricing negotiations with suppliers who rely on their continued successes in order to, themselves, remain profitable. This is what characterizes an oligopoly when a market is dominated by only a handful of large-scale competitors. In this structure, firms can have either differentiated or non-differentiated products offered to consumers where advertising and marketing objectives characterize one of the most important features related to business strategy and competitive behaviours (Boyes & Melvin, 2005). Why is th is? Supermarkets rely on consumer attitudes and behaviours to ensure they remain profitable which are always subject to fluctuating demand schedules and eating habits. Also based on price, consumers will choose one competitor over another in this market structure which drives the necessity for more innovation in marketing and the routine environmental and competitive analyses required to remain successful and profitable. Under macroeconomic theory, an oligopoly is considered to be the most realistic market structure since there are a diverse range of externalities and internal business behaviours that impact whether the firms gain higher volumes of market share in a local or international region (Boyes & Melvin). These supermarkets in their oligopoly maintain a downward-sloping demand curve where the shape of the curve is directly related to consumer behaviour patterns and the behaviours of competition in relation to strategy, marketing and advertising. This is why the supermarket s ector in the UK is considered the most realistic of market structures as the importance of competitive behaviours and marketing are in-line with contemporary business practices with most non-supermarket organisations. Because of their dominance in this market sector, suppliers are made weak when considering consumer-based commodity products (quickmba.com, 2011) as they rely directly on the purchasing power of the supermarkets to maintain their production levels, adequate staffing and overall operational strategies related to the intent of building higher profitability. This gives

Change & Continuity in Contemporary Business Essay

Change & Continuity in Contemporary Business - Essay Example It also enthused the workforce with renewed vision of the company and provided clarity to them with regard to their roles in the makeover of the organization. Yet, the transformation could be called only a part success since this transformation has not solved the company’s major problem of ageing median age of its customers. The company would be again forced to brainstorm in order to tackle this situation. In the hurry to tackle immediate crisis, it has not made any provision for future market changes. It is yet to act as per the perceived changes in the coming years. Eventually, the report recommends that Harley Davidson should seek its future in newer market segments with new products. Among its employees, it should train and guide a chosen set of people to catch the signs of advancing change in the market scenario and take steps to prepare accordingly. It also recommends the organization to diversify in other automobile segments such as cars and commercial vehicles. As evident from the time bar above, Harley Davidson saw lots of ups and downs before it entered the transformation phase. Harley Davidson, in its early days was the only motorcycle manufacturer in America and ruled the motorcycle market. However, it was caught unawares when foreign entrants flooded the market with innovative, quality and affordable products. The Japanese players catered to newer market segments untapped by Harley. The change in management of the company and the new management’s haste to catch up with the competitors added to the woes of the company which was already suffering from declined market share. The company slumped to its lowest in terms of market share i.e. 23%. It was at this point that few of its managers decided to take over the company. They tried to understand the strengths of the competitors and the weaknesses of their own organization and brought about a fresh insight into work. Under the able leadership