Market Structures
Cedric Knight
Renee Singh
Sheri Slusher
Wave Robinson
Said Aouita
Introduction
Product Life Cycle – Wave
Oligopoly and Other Strategies – Sheri
Additional Strategy or Variation - Said
Conclusion - Renee
Product Life Cycle
What strategies could the firm purse to
prolong its profitability?
Understanding the Economic Environment
Forecasting
Leverage technological innovations
What is an oligopoly?
In an oligopoly, the revenue, market share,
and profits depend on both the absolute price
and the price relative to the competitor’s.
The price differential determines the
market share, revenues, and profit.
Oligopoly
The model used in the simulation for an oligopoly.
2006 the patent on the optical computer technology
expired.
Orion Technologies entered the optical notebooks
market.
Captured 50% of the market
Duopoly
Strategy’s
The strategy of an oligopoly with little
competition is that the payoff of each
competitor depends on its own actions as well
as the actions of the competition.
Examples:
Profit
from setting a certain price
Profit from producing a certain level of output
Profit from an advertising campaign
Profit from an adoption of a new technology
Strategic Behavior
A rational competitor needs to conjecture
about what the conjectures of the
competitor’s could be. The strategic
action means that each competitor takes
into account the likely reactions of the
competition. The actions are the same
as playing chess.
Keynes’ Question
Buy-and-hold-forever investor
Faced with the challenge of changing
your mind
Decide to sell
Effectively changing your mind about
the prospects of the investment
Solving the challenges in selling
Two classifications of the market structures
 The number of coalitions in a market structure
 The dimension of the firms within a market structure
Critical size for market structures
 A market strategy structures is different
 Strategy comes from understanding the market situation
Understanding The Market
Tools to convert price
 Value, value change (Market Profile) and to market
condition and risk (Overlay Demand Curve)
Advantage of understanding the market
 Setting up a strategy
 Selling products
Sell products for profit
Products are becoming more affordable
with very competitive pricing
Build and sell computers for a
reasonable fee
Incorporate a higher profit margin
Conclusion
Product Life Cycle – Wave
Oligopoly and Other Strategies – Sheri
Additional Strategy or Variation - Said
Any Questions?