Market Analysis - Economic Analysis Module 5 Market...

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Economic Analysis Module 5 – Market Analysis Lisa M Iodice MBA-502; Dr. Darko
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Module 3 – Market Analysis Lisa M Iodice MBA-502 Company Selection: Pfizer Market Structure The market structure for the above company seems to be an oligopoly; a small number of firms dominate the market, there is a high degree of interdependence among companies (what will my rival do?), there are high barriers to entry and there is non-price competition (advertising) . While not a pure monopoly in terms of our textbook definition, Pfizer is an example of an oligopoly that borders on a less-pure form of monopoly. It has some of the characteristics of a monopoly (the main deviation being it is not the single firm producing a specific good). There are barriers to entry, the most pertinent being patents which places the company in a monopoly position until the patent expires. The profits from products under patent can be used to fund research on other drugs and possibly lead to patents on other prescription medications. The economies of scale within the pharmaceutical industry produces another barrier as the capital needed to enter the industry can be cost-prohibitive to new firms trying to enter. With the initial funding necessary to launch a pharmaceutical company it would be difficult for new entrants to achieve low total average costs (Brue, 2014).
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