Market Type
To implement a successful Business in the market, owners can start a business in monopolistic competition market. In this market condition, the market entry and exit are relatively easy as compare to other market conditions such as monopoly, oligopoly and perfect competition. Additionally, in this Market, individual can also manage the business in effective manner because in monopolistic competition market, there are few companies that produce and sell differentiated products to the customers. In this market, doing business is relatively easy because monopolistic competitive market faces low barriers of entry. This market is most common market structure in the United States. Most of the fast food, retail stores and cosmetics Companies use this structure in order to enter in foreign market (Tucker, 2010).
An individual, who is running his/her business in monopolistic competition market, needs management skills in order to sell the products. Individual also needs skills in planning and implementing overall marketing strategy. In this market structure, individual should have the knowledge about personal selling by which he/she can attract the customers towards the product in the market. On the other hand, in oligopoly market an individual will face the difficulty in order to manage the business. It is because the market entry in this relatively difficult rather than perfect competition and monopolistic competition market (Daughety, 2005).
Oligopoly market structure can be defined as the market where are few sellers, produce and sell homogeneous and differentiated product and also have difficult market entry. In this market structure, a new business can face competition from large organizations that can also impact on its overall marketing strategy. In this market structure the competition is tough because firms aggressively compete in the market through advertising on television and mails on internet (Tucker, 2010). Oligopoly market structure includes the real world industries such as steel, aluminum, automobiles, aircrafts, drugs, tobacco, etc. In the oligopoly market condition, few large organizations dominate the industry because the competitive move of any one company affects the entire market that increases the competition in the market. If one company changes its product price, other companies in this market also change the prices in order to match the price of product with the company (Daughety, 2005).
Competition in Restaurant Industry
Most of the restaurant companies use monopolistic competition market structure in order to enter in the market. It is because restaurant industry includes the large number of small Firms in a particular geographic area. This supports the restaurant industry to create effective competition in the market. Large number of small firm also helps the restaurant industry to create less market control over the price and product quantity. It is because companies set their price according to the other companies in the market that increase the healthy competition between companies (Hall Lieberman, 2009). Competition will also be characterized on the basis of similar products. In monopolistic competition market, each firm sells similar products and services to the customers that increase the competition in the market.
There can be sub-markets of restaurant industry such as perfect competition and oligopoly market structure. In these two market structures, restaurants companies can enter in the market. With the support of perfect competition, restaurant companies easily enter in the market and create effective competitive environment for other companies, which are related to the restaurant field. In the perfect competition market structure, buyers do not have enough experience about the product and Services that a restaurant company offers to them. It helps the company to attract more customers towards the company. At the same time, restaurant companies will select oligopoly market structure in order to enter in the market. In this market situation, restaurant companies offer high value, high quality and exclusive services for the customers. In this market structure, it is easy for the company to control over the industry (Sexton, 2010).
References
Daughety, A. F. (2005). Cournot Oligopoly: Characterization and Applications. UK: Cambridge University Press.
Hall, R. E. Lieberman, M. (2009). Microeconomics: Principles and Applications. USA: Cengage Learning.
Sexton, R. L. (2010). Exploring Economics. USA: Cengage Learning.
Tucker, I. B. (2010). Economics for Today. USA: Cengage Learning.
