Advantages and Disadvantages of a Duopolistic market structure
Advantages and Diadvantages of a duoppolistic Market structure jaiveer Khurana
GBBA10028
09/10/2013
Advantages and Disadvantages of a Duopolistic Market structure
A duopolistic market structure is a form of oligopoly in which two main companies dominate most of the market share of a particular product or a service. The impact on the market is quite similar to that of a monopoly.
In a duopolistic market structure the companies that have a duopoly reap the full benefits of controlling the price and output in the market. But this makes it very difficult other companies to enter the market or survive in the long run
In Australia the best example of a duopoly is perhaps Woolworths and Coles. Lets take the case of the Woolworths and Coles Duopoly to explain the advantages and disadvantages of a duopolistic market structure that exists in the Australian Market
Advantages of a Duopoly from a company viewpoint
Price Power- Woolworths and Coles collectively control about 80% of the country’s grocery market and they exploit their market share to the fullest. The supermarket power what these two retailers have achieved is mainly because of their ability to have a control on the pricing of the products they sell. Any consumer’s main concern is to get the best quality and maximum amount of quantity in the money that they spend on groceries. The home brand product that these supermarkets offer considerably cost less than the other brands, which they offer of the similar products. . Supplying the home band products that Coles and Woolies have been offering has been beneficial to the both in many ways. A lot of suppliers have been forced to cut down on their prices so as to match the price range of the home brand products. Most of the substitutes of the products from companies like Coca-cola, Heinz, Kwality walls, Nestle can be easily found. The products of these kinds of suppliers are easily discriminated if these suppliers do not cut down their prices. . For example The
GBBA10028
09/10/2013
Advantages and Disadvantages of a Duopolistic Market structure
A duopolistic market structure is a form of oligopoly in which two main companies dominate most of the market share of a particular product or a service. The impact on the market is quite similar to that of a monopoly.
In a duopolistic market structure the companies that have a duopoly reap the full benefits of controlling the price and output in the market. But this makes it very difficult other companies to enter the market or survive in the long run
In Australia the best example of a duopoly is perhaps Woolworths and Coles. Lets take the case of the Woolworths and Coles Duopoly to explain the advantages and disadvantages of a duopolistic market structure that exists in the Australian Market
Advantages of a Duopoly from a company viewpoint
Price Power- Woolworths and Coles collectively control about 80% of the country’s grocery market and they exploit their market share to the fullest. The supermarket power what these two retailers have achieved is mainly because of their ability to have a control on the pricing of the products they sell. Any consumer’s main concern is to get the best quality and maximum amount of quantity in the money that they spend on groceries. The home brand product that these supermarkets offer considerably cost less than the other brands, which they offer of the similar products. . Supplying the home band products that Coles and Woolies have been offering has been beneficial to the both in many ways. A lot of suppliers have been forced to cut down on their prices so as to match the price range of the home brand products. Most of the substitutes of the products from companies like Coca-cola, Heinz, Kwality walls, Nestle can be easily found. The products of these kinds of suppliers are easily discriminated if these suppliers do not cut down their prices. . For example The
Bibliography: Parker, C. (2013, Feb 13). ACCC’s inquiry into supermarket bullying misses the real issue of duopoly power. The Conversation . MCCRANN, T. (2013, September 1). Who pays for the Coles and Woolworths price war? Herald Sun . Stewart, C. (2013, July 29). Threat to supermarket petrol discounting. Retrieved from Financial Review: http://www.afr.com/p/national/threat_to_supermarket_petrol_discounting_oTEFQtVqQZWB5KD8ZrFCCN EDITOR, J. R. (2013, July 29). ACCC 's Rod Sims gives Woolworths and Coles a rocket over petrol shopper dockets. Retrieved from new.com.au: http://www.news.com.au/money/money-matters/accc8217s-rod-sims-gives-woolworths-and-coles-a-rocket-over-petrol-shopper-dockets/story-e6frfmd9-1226687591620 Business, K. S. (2011, April 11). Milking the Market: What 's Behind the Coles-Woolworths Price War? Retrieved from http://knowledge.asb.unsw.edu.au: http://knowledge.asb.unsw.edu.au/article.cfm?articleid=1373 Battersby, L. (2013, March 5). Suppliers rate Aldi above Woolworths and Coles. Retrieved from http://www.smh.com.au: http://www.smh.com.au/business/suppliers-rate-aldi-above-woolworths-and-coles-20130305-2fidz.html Kruger, M. H. (2012, March 6). Suppliers tackle Coles and Woolworths with complaints to ACCC Read more: http://www.smh.com.au/business/suppliers-tackle-coles-and-woolworths-with-complaints-to-accc-20120305-1uefi.html#ixzz2h8YIRqc5. Retrieved from http://www.smh.com.au: http://www.smh.com.au/business/suppliers-tackle-coles-and-woolworths-with-complaints-to-accc-20120305-1uefi.html kruger, C. (2012, November 2). Biggest winner of price wars: supermarkets. Retrieved from http://www.smh.com.au: http://www.smh.com.au/business/biggest-winner-of-price-wars-supermarkets-20121102-28olq.html jones, E. (2011, April 6). Coles and Woolworths duopoly hard to swallow. Retrieved from http://theconversation.com: http://theconversation.com/coles-and-woolworths-duopoly-hard-to-swallow-533