Complete 1 page APA formatted article: Comment to Peer Response DQ1DA and DQ2 KD. Peer Response al Affiliation) Oligopoly Oligopoly market have smaller number of competitors making up the industry, the few firms have control of the price of the goods and service that they offer. This kind of market calls for special strategies which are likely to affect your competition, and conversely. This calls for managers to make pleasant decisions while considering or anticipating the actions of others (Baye, 2009).
The industry that I choose to discuss is Kellogg, a world high-fiber cereal manufacturer. The reason for choosing this company is because of the kind of services, and the strategies that the company has put across to deal with its few competitors in the market such as General mills and Post. When this other companies joined the cereal production the company realized a shortfall in its earnings with a drop of about 6% sales due to continued competitive pressures in the ready to eat cold cereal market, and the reduced sales. Customers have also faced a short based on the value and nutrition. This also creates competition to the companies due to deal-seeking on finding the largest market (Michaels, 2011).
Strategies to address New Competition in an Oligopoly Market.
Addressing the issue of fresh entrants into this kind of market calls for critical managerial skills with critical analysis is the present market (White, 2008). The managers should anticipate the actions of others (Shubik, 2009). An increase in price by other companies especially top dogs will lead to the company also adjusting its market price. In the cereals industry General mills announced a price increase in the price by +4% on 25% to 33% of its products. Kellogg’s is likely to respond the same way.
The strategies set to put the sales back on track will ensure the reinvestment into the business, with the lowering of the up-front cost of shares to 12 cents. the internal growth will be expected to rise with the general improvement in category trends such as product promotions to the outside world. This will ensure that the 4.5% fall in customer demand is raised for the company to begin making profit (Friedman, 2003).
Baye, M. R. (2009). Oligopoly. Stamford, Conn.: JAI Press.
Friedman, J. W. (2003). Oligopoly theory. Cambridge: Cambridge University Press.
Michaels, R. J. (2011). Transactions and strategies: Economics for management (1st Ed.). Upper Saddle River, NJ: Cengage.
Shubik, M. (2009). Strategy and market structure. competition, oligopoly, and the theory of
games. New York: Wiley.
White, P. (2008). Strategies in Oligopoly Market. Wharton: University of Pennyslivannia Press.