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Discuss the four primary market structures and how they differ. Give an example of each type firm.© BrainMass Inc. brainmass.com October 25, 2018, 8:40 am ad1c9bdddf
The Four Market Models
Market models are ideal types. They don't actually exist. They are used as mental boundaries when analyzing different kinds of markets. Almost always, a specific economy will have elements of all four. We might distinguish them by which of the four it exemplifies the most.
First of all, remember what they all have in common: they are materialist, they deal exclusively with how production is organized, they place capital, prices, employees and consumers in positions of greater or lesser power, and hence, these are also social theories. Each has an empirical and a normative component. Most of all, we can assume that, in general, firms in all market types have an interest in making products that people want and are willing to buy. Efficiency is another constant, since under no real circumstances would a wanton waste of resources make sense. All firms in all markets want to increase profits and market share, or at least, keep what they have. Most abstractly, each model is an ideology that has a certain mental scheme that justifies it.
The four types are:
This is a theoretical model developed by Adam Smith. Of all the models, this is the one that is impossible to actually see in practice. It is typified by a large market with many small, independent producers. They are all making the same product. Customers have full knowledge of the owners, production methods and the product itself. New firms can enter the market effortlessly. Profit margins are barely extant, and all prices are the same. No one firm can affect the nature of the structure or the behavior of their competition. Consumers have all the power, while capital has very little.
While still an ideal type, such a model does exist in practice. It is a system where the market is dominated by a small number of large firms producing the same type of products. Examples of oligopolies are endless: ...
The following posting discusses the four primary market structures and how they differ.
International Business Competitiveness
1. What are the characteristics of corporate strategy? What are the characteristics of business strategy? How do these differ? Provide an example of each strategy.
2. Identify the 5 Forces in Porter's Industry Analysis Model. Then discuss three important factors for each force
3. There are many goals corporations may have. Identify two goals and provide examples of each. Then discuss how the strategy of the corporation is different as they follow each of the two goals.
4. As companies develop international strategies they can take different structures. Your text and the slides for the course identify several structures. Please discuss in detail three of these and how they differ.
5. "The fact that so many companies that have been outstandingly successful in their home market have failed so miserably in their overseas expansion demonstrates the complexity of international management." Please comment on this statement using models and theories from the class in your discussion.
6. There are many reasons a firm may choose to diversify. Please identify two of these. Then comment - with examples - on why a firm would diversify
7. One of the most common tools used to analyze the portfolio of a diversified company is the Boston Consulting Group (BCG) matrix. Please identify the components of this model. Then - discuss in detail the pros and cons of this model?
8. The text and the lectures identify three generic strategies. Please discuss all three of these and the differences among them. Be sure to provide an example of each strategy.View Full Posting Details