The Impact of New Companies Entering the Market
Market Trends Impact
Eleni Foreso, Pat Norton, Fabian Rangel and Heidi Hamlin
University of Phoenix
Eco365/Fathelrahman
April 29, 2008
Market Trends Impact This paper will analyze the impact of market trends on the computer industry and the organization Dell, Inc. The market trends will be identified within the following areas; market structure, prices, technology, production, cost structure, competitors, regulatory, supply and demand. The paper will also discuss the impact of new companies entering the market.
Market Structure and Pricing This part of the paper will cover market structure, the impact of new companies entering the market, prices, and how each of the following will or will not change, and why. According to this week’s readings, market structure refers to “the physical characteristics of the market within which firms interact” (Colander, 2004). The four types of market structures are: a perfect competition, monopoly, monopolistic competition, and oligopoly. In looking at the four different types of market structures, Dell, Inc.’s company characteristics fit into the monopolistic competition. The characteristics of a monopolistic competition are that many firms exist, few barriers to entry, and pricing decisions are based on market costs equals market revenue. The output is somewhat restricted by product differentiation, each firm acts independently, and no long-run economic profit exist. Dell, Inc. will not change from being a monopolistic competition, because of being involved in the computer industry, and because the computer industry is constantly changing and growing larger every day, by becoming more of a global market. The impact of new companies entering the computer industry/market has been major growth, successful localization, and entering the multimedia era on a larger scale. Growth has included mass amounts of new games, hardware, software, devices, operating systems and computer
Eleni Foreso, Pat Norton, Fabian Rangel and Heidi Hamlin
University of Phoenix
Eco365/Fathelrahman
April 29, 2008
Market Trends Impact This paper will analyze the impact of market trends on the computer industry and the organization Dell, Inc. The market trends will be identified within the following areas; market structure, prices, technology, production, cost structure, competitors, regulatory, supply and demand. The paper will also discuss the impact of new companies entering the market.
Market Structure and Pricing This part of the paper will cover market structure, the impact of new companies entering the market, prices, and how each of the following will or will not change, and why. According to this week’s readings, market structure refers to “the physical characteristics of the market within which firms interact” (Colander, 2004). The four types of market structures are: a perfect competition, monopoly, monopolistic competition, and oligopoly. In looking at the four different types of market structures, Dell, Inc.’s company characteristics fit into the monopolistic competition. The characteristics of a monopolistic competition are that many firms exist, few barriers to entry, and pricing decisions are based on market costs equals market revenue. The output is somewhat restricted by product differentiation, each firm acts independently, and no long-run economic profit exist. Dell, Inc. will not change from being a monopolistic competition, because of being involved in the computer industry, and because the computer industry is constantly changing and growing larger every day, by becoming more of a global market. The impact of new companies entering the computer industry/market has been major growth, successful localization, and entering the multimedia era on a larger scale. Growth has included mass amounts of new games, hardware, software, devices, operating systems and computer
References: Colander, D.C. (2004). Economics (5th ed.). Burr Ridge, IL: Irwin/McGraw-Hill. NexTag Comparison Shopping (2008). Retrieved from http://www.nextag.com/Axiom--300000/dell-computers/brand-html. OLPC Foundation (2008). Mission. Retrieved on April 27 2008, from http://www.laptop.org/en/vision/mission/index.shtml. Unknown (2008). Dell lays off 900 as it closes once—groundbreaking PC factory. Gawker: Valleywag. Retrieved on April 21 2008 from International Security & Counter Terrorism Reference Center database.