Market Structure in Australia

1. Introduction

The market structure mirrors all the essential parts of the business sector. It incorporates the number of organizations present in the industry, the kind of product created, the likelihood of entering and exit of organizations, the number of clients, and the capacity of a solitary organization to impact the market price. The lower the organization’s capacity to impact the business sector, the more competitive the industry is considered.

Normally, any company or any business is fixed to four types of market structure; viz, Monopoly, duopoly, oligopoly & monopolistic rivalry. (Dowrick 1993). Throughout the life of their operation, an organization can keep moving from one type of market structure to the other type. This development through the different structures may be due to the enhanced quality of products, competition, and demand of the consumers.

How would you choose the best assignment help website for your assignment

2. Discussion

When an organization deals with any special product, it is said to be a monopoly business. When a company manufactures such products for which no substitute product can be made or produced, then in such type of cases, monopoly is said to happen. In this situation, there is only one company or specialist in the market and they have full authority over the production and delivery of those products. Being a single operator in the market they can easily create a sense of risk for any potential rival. In Australia Monopoly is found in the associations which give public service, for example, cable transmission and electricity, they are to a great extent directed by government organizations. The monopoly business models need gigantic monetary assets for their operations and development.

In any monopoly business model, the main objective of a company is to dominate the entire market while keeping its product unique. A few instances of organizations that work in a Monopoly marketing structure in Australia are Telstra and Energy, Aus.

Telstra has a very close monopoly on the full infrastructure of the telecommunication industry while keeping a hold on the copper wire system, mainly utilized for the transmission of phone calls as well as internet services.

Duopolies or oligopolies are mainly followed by most companies, which are different from monopolies. In a duopoly, two companies deal in the same type of products or range of products which might be a little different from each other. In this, both companies are a boss in the market for the given products or services. A duopoly can be said to be a basic oligopoly, where the entire market is full of different organizations.

Unit 4: Business Environment

Even if the two companies of the duopoly clash on any output or price, the duopoly has the same effect on the market. A clash of two companies ends in a higher price being paid by the buyers which is more than what they would normally pay which is considered to be against the US antitrust law. The Rudd government’s grocery price inquiry discovered such a ”comfortable duopoly” between market monsters Coles and Woolworths (Jessica 2010).

In oligopolies, few suppliers act as full controllers of a large part of the supplies. In this way, Oligopoly is a market structure in which a smaller number of firms have the vast lion’s share of the market. An oligopoly is like a monopoly, aside from the fact that as opposed to one organization, two or more organizations command the business sector. An oligopoly is a point at which a modest group of organizations commands a market. In Australia, the retailers of petrol as well as banks can be considered as a good example of an oligopolistic Market.

In an oligopoly there is no specific number of organizations, still, they should be lesser in number so that one company’s activity has more impact on the other company. They should produce homogenous products like aluminum or differential products like cigarettes, and cars. Because of the reason that it requires a tremendous financial cost, a small number of organizations can bear to enter such a market as the market for oil refining or steel production. In Australia, companies like Toyota, Ford, and British American Tobacco are the followers of the Oligopoly market structure.

MNG00724 Human Resource Management Sample

Monopolistic rivalry happens when potential rivals of the organization attempt to build up a differential strategy of marketing with a specific end goal of catching market share. For instance: Coles, Wolly, Aldi, IGA, etc. offer products to the customers; however, each of them follows a different strategy (Jessica 2010).

As per the Economists, the monopolistic and oligopolistic mainly follows two things:

first, they are uncalled for to customers, and
Second, they are wasteful (Jessica 2010).

Firstly, such markets are not preferred as they allow the vendors to decide on the price of the products and not take or buy at that price. In a market with a high level of competition, prices are decided exactly based on the production rates, if this is not followed, the competitor will reduce the cost at such a level which will attract the buyers more towards them. But in case there is just one seller or at least a couple of sellers, they can easily set the cost depending on their expenses of production and save the revenue as their profit (Jessica 2010).

Economists avoid thinking along these lines and pay more importance to the way monopolistic markets result in a wasteful distribution of assets. Monopolists cannot decide such costs which are very high for the buyers to pay. On the contrary, they set such costs that are so high that the retailers are unable to use those services or products at a larger level. Hence, if monopoly is imposed in a country, it would simply mean lesser production of a specific product which would otherwise be beneficial for the society.

APC308 Financial Management

Monopoly busting is the work of government. One route is to regulate what the monopoly can charge. The Australian Competition and Consumer Commission can do this by deciding the rate that Telstra can charge its competitors for using their network. The government can also take the full authority of the monopoly in the same way as it does on the networks of the national broadband and levy a charge on all the buyers, e.g. internet services, the same price.

When it comes to oligopolies and monopolies, the government normally tries to avoid imposing them through the laws of competition. So the ACCC will run the leader over James Packer’s buy of a stake in Network Ten to guarantee it doesn’t generously reduce rivalry (Smith 2015).

Lately, demand is more taken into consideration by the companies, and the thought that the consumers might encourage more competition by guaranteeing, that they move from one seller to the other. In case of inactivity or disinterest, the rivalry automatically takes a back seat which increases the cost. In such cases, the rivalry is seen to start at home.

As per the article (Smith 2015), the country, Australia, is mainly famous for the companies that follow duopolies and oligopolies. There are speculative indications of duopolies breaking down in different industries. There are associations and industry structures that pushed too hard, edges are too high and the imperceptible hand ventured in and attracted new rivalry. The article clearly shows that Australia has been a home for oligopoly companies. Its significant industries, telecoms, banking, insurance, and supermarkets overwhelmed by one, two, or a small group of capable players

Telstra, which carries out its annual investor strategy, was the main real telecommunications organization in Australia for quite a long time. Presently, the company has tied up with Optus and Vodafone (Smith 2015). In the past five years, Telstra has dominated the telecommunication industry of Australia and commanded the entire cell phone market which gives its rivals more chance to keep testing the company for staying in the top position.

What are the things you should know about writing flawless anecdotes?

3. Conclusion

Australian organization Telstra is the major telecom organization. The organization’s marketing structure can be viewed as a Monopolistic structure. Monopoly busting is the employment of government and changing marketing structure in Australia proposes breaking down of Australia’s corporate oligopoly industry structure. Following decades of high margins and unnecessary income, new players are moving in for a piece of the action as they make the favorable position of the economy which is digital, and lower expenses of entry. This has brought about change in Telstra’s marketing structure hence permitting the offering of the stage to Singapore Telecommunications-possessed Optus and Vodafone Australia.