Shoe Industry

Topics: Perfect competition, Monopoly, Pricing Pages: 2 (457 words) Published: April 14, 2013

Shoe Industry Competition
In the business part of the world monopolistic competition can be defined as the type of imperfect competition such that many producers sell products that are differentiated from one another as goods but not perfect substitutes (such as from branding, quality, or location). In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms. There are a wide variety of companies that engage with these qualities for a variety of reasons that come with benefits towards the large and upscale business that control the trade with consumers and the producers. Some of these companies that engage in monopolistic competition include the Nike, Reebok and Adidas competition. The three of these companies regulate and control the shoe industry. The country and the world and I feel that Nike the most out of these three companies. It benefits through pricing, and product quality development. Nike uses the vertical integration pricing strategy in which they take ownership of the participants at channel levels that differ and they also engage in multifarious channel level operations both in a bid to control costs and thus influence pricing function (Goldman S, 2000, pp154). The company is able to determine the item’s price points, which tend to be much higher than perfectly competitive industries by virtue of their branding efforts. Which helps the Company in creating revenue and setting the tempo against other companies. The way Nike benefits through product quality is that it enhances a firm's ability to improve a product's quality through its brand. Economists defend branding as a way to enhance trust and

Reliability to the consumer. (Hopkins T 1999). Brands strengthen the need to maintain high quality based on the business’s (Nike’s) financial stake in its reputation. In conclusion, Nike has...
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