Current Market Conditions Paper

Current Market Conditions Paper - Current Market Conditions...

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Current Market Conditions Paper 1 Current Market Conditions Paper Christine Thompson University of Phoenix ECO365
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Current Market Conditions Paper 2 Market Structure The market structure that Target operates in is that of an oligopolistic market, meaning that the market is dominated by a few large suppliers, that being Wal-Mart, Target and Kmart. Firms that operate in this type of market will produce branded products that you see on the shelves next to the name brands. Strategic marketing and advertising is a critical feature of competition within the oligopolistic market. There is a significant amount of interdependence between these three firms, because each firm must presume the possible reactions of the other firms when making any pricing decisions or investment decisions like where and when to build a new store. This generates ambiguity in such markets; seeking economist’s to model the use through the game theory. Game theory is applied in circumstances in which decision makers must assume the reasoning of other decision makers. This theory is used when determining business mergers, conglomerates, the optimal pricing in which to sell products and services, establish the best site for stores, manufacturing and distribution sites.
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Current Market Conditions Paper 3 Wal-Mart, Target, and Kmart compete for market share and demand from consumers not only in price competition, which entails discounting the prices of various products in an order to increase demand; but also in non-price competition which focuses on strategies to expand on market share. Such strategies include marketing and advertising, in store pharmacies, free or reduced home delivery/shipping, longer store hours, and internet shopping. Impact of New Companies Entering the Market Target competes with nationwide and locally owned and operated department stores, discount stores, grocery stores, drug, and specialty stores. All of which offer comparable products, but there are sizeable entry barriers in an oligopolistic market, which in the long run has given Wal-Mart, Target, and Kmart substantial amounts of profits. Entry barriers
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Current Market Conditions Paper - Current Market Conditions...

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