武汉大学MBA《管理经济学》课件PPT ch10Pure Competition and Monopolistic Competition.pptVIP

Chapter 10 Pure Competition and Monopolistic Competition Pure Competition and Monopolistic Competition Pure competition is a standard against which other market structures are compared. The product is perfectly undifferentiated. When there are many firms, but the product is differentiated, the market is monopolistically competitive. This brand competition may involve advertising campaigns and large promotional expenditures to stress often minor distinctions among products Michael Porter’s Five Forces of Competitive Advantage The forces that determine competitive advantage are: Substitutes (threat of substitutes can be offset by brands and special functions served by the product). Potential Entrants (threat of entrants can be reduced by high fixed costs, scale economies, restriction of access to distribution channels, or product differentiation). Buyer Power (threat of concentration of buyers). Supplier Power (threats from concentrated suppliers of key inputs affect profitability). Intensity of Rivalry (market concentration, price competition tactics, exit barriers, amount of fixed costs, and industry growth rates impact profitability). Figure 10.1. What Went Wrong With Xerox? After inventing chemical paper copiers, Xerox enjoyed 15% growth rates in the 1960s and 70’s. As their patents expired, new rivals such as Ricoh and Cannon aimed their copiers at smaller businesses and smaller volume users. Xerox continued to build all parts in-house and suffered from serious price competition. Xerox’s strategy led to erosion of its once dominant status to that of an also-ran没有成功的或无成就的人. The Relevant Market Concept A market is a group of economic agents that interact in a buyer-seller relationship. The number and size of the buyers and sellers affect the nature of that relationship. A popular measure of concentration is the percentage of an industry comprised of the top 4 firms. Similarly, the market share held by the top 4 buyers is a popular measure of buyer c