Global Market Concentration and Oligopoly

Global Market Concentration and Oligopoly

Introduction

An oligopoly is the form of market in which there are few sellers. Every seller in this market wants to know the action of the other competitors. The decisions taken by any firm or organization can directly influence the decisions or action of the other. It is the most seen form of market. Normally, the competition is between three or four organizations in the same industry, seen on the front as a percentage. There are very few producers in this type of market, though all of the producers have control over the wide range of market. There is a high concentration in this type of markets. The behavior of firms within the market can best define the oligopoly rather than the market structure. In economics, the concentration is basically because of market, producers and sellers. The shares and functions of the firm and organization are the market concentration. Majority of the business running in the world are part of oligopoly. Every business, which is well-known, is the victim of oligopoly.

Discussion

Every big industry is within an oligopoly due to competition. In the last century, the competition was not as high as it is today. Every industry wants to beat the other industry and wants to produce more and best. Each firm related to any type of industry is facing an oligopoly. These firms are trying their best to produce goods within the short time period. The main thing to focus on any industry is to satisfy the customer needs and demands. The best marketing is the one in which every single customer satisfies and it can be done when the goods are delivered at low costs and at short period. There are certain industries in which the oligopoly is imperfect and such industries are of soft drinks, tobacco companies, and air lines. There are as many companies of soft drinks and tobacco worldwide, no one can even think of an oligopoly in these types of firms. The best examples of the companies who are running within the oligopoly are steel industry, film industry, oil and gas industry, cell phones and televisions, and aluminum industry. If we take the example of Music Company, there are four companies, which ruling the world for their best music i) Universal Music Group ii) Sony Music Entertainment iii)Warner Music Group iv) EMI Group. The other example is of beer producer. There are two major industries, Anheuser-Busch and MillerCoors. Today, the market concentration is high, and the majority of the percentage, of market taken by large, and leading firms. Marketing and advertisements are the keys assets of this competition.

There are two popular theories of oligopoly. These theories are Kinked-Demand Theory and Cartel Theory. According to Kinked-Demand Theory each firm sell diffrenciated product. Kinked-demand theory illustrates the interdependence of oliopolists in the market and considered as the incomplete theory because of several reasons which are necessary to discuss in this essay.

The major issues of oligopoly are mainly firms may ...