Significance of Proper Identification of the Market structure for the Essay

Significance of Proper Identification of the Market structure for the Organisaition using the example of The Ritz Carlton company - Essay Example However, consumer electronics industry is experiencing perfect competition and hence it is impossible for companies in this market to fix prices for their products. On the other hand in market with Oligopoly, only few suppliers are there and it is possible for the firms in such markets to control the price and market activities in such market structure. For example, OPEC is enjoying oligopoly in oil market. In monopolistic competition, there could be numerous suppliers; however, only few enjoy monopoly. In smartphone market, APPLE and Samsung are ruling now. Even though companies such as Nokia, LG, Blackberry, and Sony Erickson are there, only APPLE and Samsung have the upper hand. Even though monopolistic market structure is the primary objective of all organizations, it is difficult to maintain supremacy in such markets for a prolonged time. It is almost impossible for Ritz Carlton to think about following a monopoly or oligopoly market structure at present because of the huge capa bilities of competitors. At the same time, it is possible for Ritz Carlton dominate the hotel industry along with prominent competitors such as InterContinental Hotel Group, Marriott International Hilton Hotels and Global Hyatt. Key internal and external factors affecting Ritz Carlton Manpower cost is extremely high in American and European regions compared to that in Asian region. Moreover, global wealth is currently shifting from American and European is not so good for Ritz Carlton. Monopolistic competition helps companies to attain huge profits for a short period and a normal profit in the long run which is evident from the following illustrations. (Monopolistic competition, n. d.). From the above graph it is evident that the arrival of...This paper outlines the importance of proper identification of the type of market where the organization is intending to conduct business. The case of The Ritz Carlton Hotel Company, one of the prominent hotel groups, which is planning to expan d into new Asian markets, is under consideration. The increased readiness of overseas countries in recent times in attracting foreign direct investment is helping Ritz Carlton to think positively about market expansion. Since competition is different in different regions, the objective of Ritz Carlton is to identify less heavily competitive service markets across the world. Asia is the rapidly emerging region at present and Ritz Carlton is giving more attention to this region at present. Identification of proper market structure is necessary for Ritz Carlton to excel in emerging markets. Based on the competition in the market, market structure can be divided into four major categories. In markets with perfect competition, the market determines the price whereas in monopoly, instead of market, the company decides the price. In market with oligopoly, only few suppliers are there and it is possible for the firms in such markets to control the price and market activities in such market structure. It is difficult to maintain supremacy in markets with monopolistic competition for a prolonged time. The ability to set different prices to different markets (price discrimination) is one of the major advantages of having a monopolistic market structure. Monopolistic competition helps Ritz Carlton to prove the worth of its products and services to the customers. Moreover, it helps Ritz Carlton to enjoy huge profits for short terms and normal profits in the long run.