Operations Decisions Market Structure Is A Microeconomics Essay

Length: 5 pages Sources: 5 Subject: Business - Advertising Type: Essay Paper: #33217312 Related Topics: Operations, Weight Watchers, Microeconomics, Oligopoly
Excerpt from Essay :

Operations Decisions

Market structure is a microeconomics term that encompasses the interconnected attributes of a market. The variables examined when considering market structure include characteristics of buyers and sellers, competition, product differentiation, and ease of moving into and from the market. Factors such as the number and strength of buyers and sellers, along with any collusion that may develop among them, are very influential on market structure, as evident in this discussion. An analysis of the competition will consider the occurrence and degree of product differentiation that is occurring. Finally, two important attributes of market structure are the ease of entry and exit from the existing market.

Traditionally, four fundamental market structure types are recognized: 1) Perfect competition, in which many buyers and sellers engage without being able to control prices; 2) Oligopoly, in which a number of large sellers have established some control over prices; 3) Monopoly, in which a single seller maintains near absolute control over supply and, therefore, over prices; and 4) Monopsony, in which a single buy exercises considerable control over demand and, as a result, over prices.

Assessing Market Structure Effectiveness

The strongest competitive forces are the drivers of profitability for a market; hence these competitive forces are key to an effective analysis and to the formulation of market strategy. It is critical to recognize that the most relevant competitive forces are not always salient, which means that conducting an assessment of market structure effectiveness for the operations of a particular company is a complex endeavor.

The most likely market structure in with this low-calorie food company operates is perfect competition at the niche level and oligopoly for large food manufacturing companies that have acquired other brands and businesses. It is helpful to consider that new low-calorie foods may be introduced to the market as niche products, but robust launches that result in a strong consumer following typically develop into entire product lines.

Two leading competitors in the low-calorie microwavable food industry are Lean Cuisine and Healthy Choice. Lean Cuisine has a 20.7% of the healthy eating and contaminated food supplies. Moreover, the influence of social media and the digital flow of information continue to trend high with respect to lifestyle-referenced consumer behavior.

Production and Cost Functions of Low-Calorie Microwaveable Foods

The challenge to the low-calorie, microwaveable food manufacturing companies is to determine how to choose the constellation of inputs that minimize the cost of producing the food products. This cost-minimization challenge has different facets depending on whether the period is for short-run or…

Sources Used in Documents:

References 5

Besanko, D. And Braeutigam, R. (2010). Microeconomics: An Integrated Approach, Cost and cost minimization [Chapter 7], pp. 30-235. New York, NY: John Wiley & Sons. Retrieved http://www.fep.up.pt/docentes/moutinho/micro/Besanko-ch07.pdf

Newman, A.A. (2012). Spots for Healthy Choice try to feel dieters' pain. The New York Times. http://www.nytimes.com/2012/09/14/business/media/healthy-choice-ads-try-to-feel-dieters-pain.html?_r=0

Shulman, (2011, February). Assimilation and contrast in price evaluations, Journal of Consumer Research. Retrieved http://www.foster.washington.edu/

centers/facultyresearch/Pages/price-analysis.aspx


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