Forms Of Industrial Organization
Forms of Industrial Organization
There are four market structures that differ in several respects which are pure competition, pure monopoly, monopolistic competition, and oligopoly. There are several attributes that contribute to the following structures and they are the number of firms in the industry, whether those firms produce a standardized product or try to differentiate their products from those of other firms, how easy or how difficult it is for firms to enter or exit the industry and if the firms are price taker or price makers (McConnell & Brue, 2004). The following paper illustrates the pricing and non pricing strategies that known firms have implemented to stay competitive in their respective market model.
Pure Competition
Pure competition involves a large number of independently acting sellers, often offering their standardized products in large national or international markets. As long as the price is the same, the consumer will be indifferent about which seller to buy from. Companies in this market are price takers meaning they can not change the market price of the product but only adjust to it. (McConnell and Brue, 2004). Imperial Sugar Company (NASDAQ: IPSU) specializes in the manufacture and distribution of refined sugar. The company markets and sells granulated white, brown and powdered sugar to grocery customers in packages ranging from six ounce shakers to 25 pound bags. The packages carry brand names Holly, Dixie Crystals, Imperial and Sucanat which is a sugar produced from organically grown sugarcane. (Datamonitor, 2006) Sugar retail prices in the US have been stable for the past 25 years at 43 cents per pound compared to 58 cents per pound in Europe and over 77 cents per pound in Japan. (American Sugar Alliance, 2006) Imperial Sugar is part of a competitive market meaning that is a price taker, it cannot change the market price; it needs to adjust to it. Imperial Sugar Company suffered from significant energy cost...
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