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Tantramarsh Club
The threat of new entrants is relatively small. The Sackville market is mature, with limited population growth, and there was little expected growth in the student population at Mt. A. Most of the existing competitors in the market had been in business for over a decade or more. Although there are few barriers to entry, the limited upside offered by the market reduces the threat of new entrants.
The rivalry among existing firms is characterized as "friendly but relatively fierce," a condition that is predictable based on the limited market upside and the personal stakes that many of the local bars have in maintaining their business. The annual turnover of students provided opportunities to win new customers each autumn, and the student population is generally quite fickle and price sensitive. This high propensity to switch and the lack of switching costs meant that every night was a new opportunity to win business, and this drove the competitive intensity,...
The main threat of substitution comes from drinking at home. This is the most cost-effective option, but carries with it a limited social upside. Thus, most students do some combination of drinking at home and then going out to drink in a more social situation. There is a lesser threat of substitution from non-drinking activities, and from student road trips to Moncton or Halifax. All told, students at Mt. A are mostly likely to spend at least some of their entertainment dollars at the town's bars, given the limited realistic options for substitution.
The bargaining power of suppliers in the industry is high. Suppliers include breweries, the NBLC, food suppliers and labor. All suppliers but labor are high volume operators for whom the volume offered by a bar in Sackville is unimportant. There is little differentiation among inputs,…
Works Cited:
QuickMBA (2010). Porter's five forces. QuickMBA. Retrieved February 15, 2012 from http://www.quickmba.com/strategy/porter.shtml
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
Oligopolies Part 1) One proposed merger is Omnicare's bid to purchase Pharmerica (FTC, 2012). The FTC has defined the industry as "long-term care pharmacy" and these are the two largest firms in that industry. The FTC has sued to block this proposed takeover. Pharmerica is the only national competitor for Omnicare. Firms in this industry work with institutions to provide pharmacy services. The industry has some fragmentation, but there are only
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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
In perfect competition, only normal profits are made in the long run and monopolistic competition trends towards a relatively equal distribution of income (Hartzenberg, 2005). This relationship implies that the further the market is from perfect competition, the further the distribution of income will be from equal. An oligopoly, therefore, will not deliver equal distribution of income. In perfect competition, distribution of income is equal because all factors of production are
Ice Cream and Oligopoly The concept of an oligopoly market in economics means that there are few top sellers of a certain product, as opposed to many competitive companies. These sellers are generally in high competition with each other, but have tremendous power in pushing their products to consumers. Because there are few sellers in the market, they tend to be hyper- aware of each other and have a high level