Market Structure Analysis in Tanzania

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Market structures Analysis- Term Paper

INTRODUCTION

Generally the concept of market structures can be essential to marketing and economics. Both emphasize the environment in which these companies operate and its importance it has on strategic decision making. Economics is more concerned about the degree of market competition and the pricing strategies of these firms. Marketing, on the other hand, concentrates its focus on consumer behaviour. Basically there are four major market structures – perfect competition, monopolistic competition, oligopoly, duopoly and monopoly. Market Structures categorize companies based on different characteristics like the number of sellers in the overall market, the kind of product, market share, barriers to entry, pricing power, efficiency and profits. Each of these specific criteria is used to describe the circumstances and the environment in which they operate. A firm can make more effective pricing and production decisions when it has a solid understanding of the industry it functions in. Four market structures exist in economics – perfect competition, monopoly, oligopoly, and oligopoly. These structures can be compared by different characteristics. These characteristics are the number and size of firms in the industry, the amount of control over price held by the firm, the type or nature of product, the conditions of entry and exit into the market, the behaviour of the firms, and the amount of non-price competition. The characteristics of each of these market structures have different affects on our economy and should be managed in a different manner. This paper will outline these various characteristics and provide a narrative on their impact in the different markets. The analysis of the different characteristics is made for different firms in the respective market structure.Degree of competition affect the consumer either positively or negatively, it also impacts on the performance and behaviour of the company/companies involved. Therefore each firm will be ranked in terms of competitiveness based on the analysis of those characteristics.

1.2. BACKGROUND INFORMATION

Prior the 15th century most economies in the world were self sufficient and were mainly based on agricultural production. Families and households grew their own goods like corps and cattle. There was very little transnational trade. The majority of trade rather took place on a regional level. Most economies had relatively identical conditions in terms of productive capacity. As such, it can be claimed, that there was no economic anarchy and that the majority of the countries enjoyed a high degree of sovereignty and there was just little interaction and trade with other economies. Productivity and so economic efficiency at that time was relatively low, Rondo E. Cameron (Oxford University Press, 1993). Economic performance and thus the performance in the agricultural sector was mainly based on human resources and the natural endowment of the economy, including its natural resources, geographical conditions and climate. Entry barriers, as defined previously, can be said to have not existed. With the beginning of the 15th century international trade was starting to catch up and experienced its first peak during the era of the British Industrial Revolution. This time period, which covers the 15th century until the early 19th century, is often also said to be the first Globalization period. Already in the 15th century until the 18th century, increased trade among national economies was common. Eurasian countries during that time based their economic performance of trade on the mercantilist idea, which was popularized by Adam Smith (1776). Indeed, international trade began to blossom by the late 15th century which also led to an increase in money circulation. Nowadays economies throughout the world are experiencing the impact of modern globalization. In the last past decades many economies have developed and grown...
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