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When faced with touch economic problems or government regulations, the only way for the industry to survive is by innovation. When one firm innovates, it benefits the other firms in the industry in a big way and this can lead to co-operations and mergers. In most cases, consumers benefit a lot from innovation in terms of the products and services they enjoy and this is likely to bring more business and profits to the industry as a whole. This is why other firms may be willing to lend resources to benefit the common good. When one company innovates, it benefits the industry as a whole and this can act as a booster to the other firms as well. An example is the five banks that rule the UK banking industry. When they were faced with a financial crisis, the banks were forced to innovate and come up with better products. This is yet another reason why oligopolistic firms are more likely to innovate than firms operating in any other form of market.
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A good case in point is the U.S. cellular industry that is dominated by AT&T, Verizon, Sprint, U.S. Cellular and T-Mobile. They had the resources to look for higher speeds for customers and the end result of this innovation is the 4G speeds for internet access. These vast amount of resources give these firms the confidence to spend money on innovation.
In short, an oligopolistic firm has the most incentives to innovate when compared to other firms. Their vast resources, interdependence on other firms and competition are some of the reasons for them to come up with unique products or better marketing techniques that will benefit the firm, industry, consumers and the economy at large. Though these firms are the price setters rather than the price takers, the consumer can enjoy a better service or product due to the innovation of an oligopolistic firm and this is sure to benefit everyone involved.
Resources
A firm operating in an oligopoly market has all the resources and technology it needs to innovate. A good case in point is the U.S. cellular industry that is dominated by AT&T, Verizon, Sprint, U.S. Cellular and T-Mobile. They had the resources to look for higher speeds for customers and the end result of this innovation is the 4G speeds for internet access. These vast amount of resources give these firms the confidence to spend money on innovation.
In short, an oligopolistic firm has the most incentives to innovate when compared to other firms. Their vast resources, interdependence on other firms and competition are some of the reasons for them to come up with unique products or better marketing techniques that will benefit the firm, industry, consumers and the economy at large. Though these firms are the price setters rather than the price takers, the consumer can enjoy a better service or product due to the innovation of an oligopolistic firm and this is sure to benefit everyone involved.
Oligopoly is a market structure characterized by a small number of relatively large firms that dominate an industry (Oligopoly, 2000). It can contain 2 to 20 firms that dominate it. As the number of firms increase, it becomes monopolistic competition where dominance is controlled by one firm. An oligopolistic firm is relatively large compared to the overall market, has a substantial degree of market control, and has significantly greater capital
Whereas in monopolistic competition it is expected that competitors will match innovations in the long run, that is not necessarily the case in an oligopoly. The firm against which you are competing might not be able to match your innovation capabilities, and that would result in your firm being able to earn profits in the long-run from innovation. If, however, there are low barriers to entry, then new firms
Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly The subject of competition is an interesting one. The general idea in economics seems to be, the more competition the better. "Good competition" results in a greater likelihood in overall efficiency and low prices. There are several main types of competition, these include, perfect competition, the most competitive market possible (and, presumably, the one of greatest value to the consumer), monopoly, the least competitive
Market Structures There are two main market structures in the market known as monopolistic competition as well as oligopoly. They fall between the extreme of real competition and pure monopoly. The two structures are vital because they provide descriptions of companies and industries that are found worldwide. The market structures differ as each one has different characteristics associated with either monopoly or oligopoly. Oligopoly Market Structure The first characteristic associated with oligopoly is
Market Behavior One industry that has seen a shift in the market model is the smartphone industry. During the mid-2000s, this industry was an oligopoly, populated basically by two firms that emerged from the old PDA market. Palm and RIM (Blackberry) operated as a duopoly, catering primarily to business customers with early smartphones. Apple joined the industry with the iPhone, and was quickly followed by a number of other players. The
Market Patterns One industry that has shifted in the past few years in terms of its structure is the smartphone operating system market. A few years ago, most of the early smartphones were based around proprietary operating systems. Palm and Blackberry dominated the market. Apple joined the industry with the introduction of the iPhone, but more recently other firms have entered the market as well, including Google (Android), Windows, Symbian and