Petronas as an oligopolistic firm essay

Both democracy and the market economy have proliferated globally since the collapse of communism, and revolutionary developments in communication and information technology have helped trigger an increasing interdependence between countries at an unprecedented pace. Further, the end of the Cold War signalled the displacement of ideological obstinacy in favour of a heated pursuit towards economic advancement and competition for resources and technology.

Petronas as an oligopolistic firm essay

There is the monopoly which is widely known for its price maximization scheme and more likely to become a burden on the part of the consumers due to high prices that it charges from its goods Econ.

Another good thing about being a monopolist is that one could easily prevent the entry o possible competitors in the market. With this, monopolists have the power to set the Petronas as an oligopolistic firm essay on what ever level based upon the situation of the market as well as competition.

Aside from monopoly, another market structure that is commonly being used by most of the firms would be the oligopoly. Oligopoly exists when there are only few sellers and more buyers in the market.

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Moreover, in oligopoly, there still exist competitions which make the prices of goods justifiable and are based on current price levels of their competitors or the market system Pietersz In other words, consumers and the government would most likely prefer oligopoly than with monopoly since societal welfare are still higher in the former than with Need essay sample on "Oligopoly: Cartel behaves like a monopolist as what have already identified from the previous statements.

This is the reason why governments of numerous countries around the globe are prohibiting the establishments of cartel while there are some who allows it but with certain restrictions on the cartels actions as well as constant monitoring Hotdin.

Now after identifying the two of most common market structure, it is now the time in order to discuss the characteristics of each market structure. But the question now would be on how it will respond to the very common threats to every business entity in the market- competition specifically the entry of new players in the industry.

Petronas as an oligopolistic firm essay

Brand loyalty serves to be one of the bases of consumption of the consumer group Extension. Cut throat competition would be the scenario wherein a well established firm would lower down their prices in order to attract more customers and leaving the new entrants to the industry to less available possible customers thus resulting to losses which could eventually leads to the shutting down of their operation Seagal Their designers and employees, with their many years in the industry, would give Marks and Spencer creative juices and expertise in innovating and developing their products.

Not only this, the said company could pioneer some product line which is not being offered by their competitors and the new entrants in the industry.

Because of the said innovation and development on the products, it makes the products of the producers to appear different from one another though they are still providing the same product- clothing. It has been found out that consumer behavior comes on a fact paced and this is sometimes become one of the primary reason why there are some companies who lost billions of dollars because they were not able to keep track the tastes and preferences of their target customers.

New entrants have only barely enough data on their hand in order to fully understand or keep track the behavior of their target customers. With this, it would take them a lot of time before their profit to become sustainable or to penetrate their target market.

This would make customers fell more comfortable every time they enter the store and would make the atmosphere light on the part of the consumers. This strategy would attract more customers and somehow establish a good relationship between the two concerned parties.

This kind of strategy was already implemented by Wal-Mart during the times where they experienced depleting sales especially in the rural areas and what their management did was to redesign their rural stores in order to attract more customers and reinvigorate their sales as well as their profitability.

But there are those cases wherein new entrants out-perform those established firms in the market. One great example for this scenario would be the entry of Tesco to the U.

Sainsbury and other established firms in the American market to flop Palmeri This only means that there is something in the strategy of Tesco to impart the said effects to those established firms.Petronas reviews.

Economics individual assignment : Microeconomics application in the real world

A free inside look at company reviews and salaries posted anonymously by employees/5(). Oligopoly-Coca cola & Pepsi Oligopoly is defined as an industry in which there are a few firms. By a few it is meant that the number of firms should be sufficiently small for there to be conscious interdependence, with each firm aware that its future prospects depend not .

PETRONAS has involved in the entire petroleum activities. From managing the sharing contractors of the foreign production, it has been changed into developing its own capabilities in the upstream sector - allow it to take the lead in the exploration and production of the nation’s oil and gas resources.

"Leading" in Petronas Essay. Characteristics of Oligopoly: 1. As there are some firms, each firm closely watches the activities of other firm. Any transform in price, product, output, and so on by a firm will have a direct effect on the fortune of its rivals.

Therefore an oligopolistic firm should consider not only the market demand for its product, however also the. A global firm (e.g.

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PETRONAS) may be in a better position to compete with its global rival, as it can enhance its resources globally (). Being able to participate in its foreign target market makes the global firm more advanced and more developed compared to its rivals in the same industry, for it is able to meet the standards and demands.

Even though firm lower their price may expand the demand as customers buy more of their products, this strategy is not permanent, at the end, they still lost the market share.

Therefore, to keep the price unchanged is a rational strategy for firms in an oligopolistic market.

Economics Discussion: Oligopoly-Coca cola & Pepsi