Market Structure My Franchise Is

Market Structure My franchise is Auntie Anne's Hand Rolled Soft Pretzels. The industry in which Auntie Anne's Hand Rolled Soft Pretzels operates is characterized by a state of monopolistic competition. The characteristics of monopolistic competitive markets are as follows. There should be many market participants. The company sells snack foods in a quick service format, and there is a near endless variety of both quick service restaurants and snack items.

The endogenous market for pretzels is limited -- almost every purchase decision will feature a choice involving some other snack food. This broadens the scope of competition to include a wide range of competitor and Auntie Anne's competes by differentiating itself against these competitors. This differentiation means that the products within the snack market are heterogonous. The firms in these markets are price makers, and Auntie Anne's is as well. There is ample freedom of market entry and exit, another characteristic of the state of monopolistic competition.

The differentiation in the market means that buyers lack perfect information, and it also helps to facilitate the condition where the substitutes are different but serve the same function. For example, a cookie or a bag of chips would be a very different product from a pretzel but all serve as snacks. Thus, the market in which Auntie Anne's Hand Rolled Soft Pretzels competes meets all of the defining characteristics of the monopolistic competition market structure. 2. There are a wide range of competitors that our company faces.

The closest competitors are also in the QSR industry offering snacks. Depending on the geographic location, these competitors can range from other baked goods like cookies or cinnamon buns, to ice cream chains or even meal-oriented QSR restaurants, since some will offer snack portions. Other snack products are also competition, and they are readily available. There is a near limitless supply of snack food available at any gas station, grocery store and convenience store in America, including packages pretzel products.

With this many potential competitors, Auntie Anne's Hand Rolled Soft Pretzels must compete vigorously. The competitors range from very large, well-financed competitors with rock-solid brands to mom-and-pop operators and small businesses. Some sell products at a premium, while others are cost leaders. This is one of the most competitive spaces in U.S. retail, and as such it is almost impossible to find a niche in the market that is unfilled. 3.

In order to compete better in an industry characterized by a state of monopolistic competition, Auntie Anne's Hand Rolled Soft Pretzels must differentiate itself from competitors. Doing this takes advantage of the imperfect information on the part of customers that allows Auntie Anne's to be a price maker. The degree to which the company can be a price maker reflects directly on its ability to create differentiation. Therefore, Auntie Anne's needs to.