Is the Watch Industry dominated by an Oligopoly*, which is beneficial E

Is the match constancy dominated by an Oligopoly*, which is estimableto two firms and consumers?*= See glossary for meanings.Hypothesis==========I believe that the receive persistence is dominated by an oligopoly, whichis beneficial to some(prenominal) firms and consumers. The gather in firms be bothprice makers*, which is good for the detect firms, and price takers*,which is good for consumers. startIn this investigation I shall be examining the watch perseverance. I go outexercising a Mintel report of the watch industry produced in 1995 and randomness worksheets to prove my hypothesis.Findings and Application of TheoriesFive companies, or the C5 ratio, dominate the watch industry. They exhaust 40% of the merchandise share* (see fig.1.). Zeon Ltd. is the marketleader*. There name been no recent take-overs or mergers in the watchindustry, so the market leadership is slight. The growth of theindustry has been organic*. GRAPHThis represent ation makes the watch industry an oligopoly, as contraryto being sodding(a) disputation*, progressive competition, or a monopoly*.There are a name of reasons wherefore the watch industry is an oligopoly.Firstly are thither restrictions to entry* as opposed to free entry*. Onebarrier to entry for early(a) future watch manufacturers iseconomies of scale*. The larger, more conventional firms have a numberof cost advantages, such as being suitable to grease ones palms raw materials in bulk orborrow large sums of money. Their turnout cost are thereforecheaper and therefore they will probably be able to address their watchesat a kickoffer price than smaller, newer firms. another(prenominal) barrier to entryis branding. All of the firms in the oligopoly have really established name in the... ...a novelty/ luxury item. The success of this strategy depends on maintaining low costs at low volume on a graduate(prenominal) quality image with fewer or no competitors.- worth Makers In a monopoly situation where there is only one, or very few suppliers. The industry can set its prices at whatever direct they sine qua non without the chance of being undercut by competition (because there is none).- value Takers In an industry where there is a lot of competition (ideally perfect competition), the sellers must have the prices of their product low in frame to sell them. If they did not have low enough prices, customers would go elsewhere as there will be many substitutes that are cheaper.Bibliography1) The Watch Industry Mintel Report- 1995 (obtained from Sheffield Hallam Universitys Adsetts Centre)2) Business and Economics class worksheets Is the Watch Industry dominated by an Oligopoly*, which is beneficial EIs the Watch Industry dominated by an Oligopoly*, which is beneficialto both firms and consumers?*= See glossary for meanings.Hypothesis==========I believe that the watch industry is dominated by an oligopoly, whichis benef icial to both firms and consumers. The watch firms are bothprice makers*, which is good for the watch firms, and price takers*,which is good for consumers.AimIn this investigation I shall be examining the watch industry. I willuse a Mintel report of the watch industry produced in 1995 andinformation worksheets to test my hypothesis.Findings and Application of TheoriesFive companies, or the C5 ratio, dominate the watch industry. Theyhave 40% of the market share* (see fig.1.). Zeon Ltd. is the marketleader*. There have been no recent take-overs or mergers in the watchindustry, so the market leadership is slight. The growth of theindustry has been organic*. GRAPHThis representation makes the watch industry an oligopoly, as opposedto being perfect competition*, imperfect competition, or a monopoly*.There are a number of reasons why the watch industry is an oligopoly.Firstly are there barriers to entry* as opposed to free entry*. Onebarrier to entry for oth er prospective watch manufacturers iseconomies of scale*. The larger, more established firms have a numberof cost advantages, such as being able to buy raw materials in bulk orborrow large sums of money. Their production costs are thereforecheaper and therefore they will probably be able to sell their watchesat a lower price than smaller, newer firms. Another barrier to entryis branding. All of the firms in the oligopoly have very establishednames in the... ...a novelty/ luxury item. The success of this strategy depends on maintaining low costs at low volume on a high quality image with few or no competitors.- Price Makers In a monopoly situation where there is only one, or very few suppliers. The industry can set its prices at whatever level they want without the chance of being undercut by competition (because there is none).- Price Takers In an industry where there is a lot of competition (ideally perfect competition), the sellers must have the prices of their product low in order to sell them. If they did not have low enough prices, customers would go elsewhere as there will be many substitutes that are cheaper.Bibliography1) The Watch Industry Mintel Report- 1995 (obtained from Sheffield Hallam Universitys Adsetts Centre)2) Business and Economics class worksheets