Is the Watch Industry dominated by an Oligopoly*, which is beneficial E

Is the Watch Industry ruled by an Oligopoly*, which is beneficialto both firms and consumers?*= See glossiness for meanings.Hypothesis==========I believe that the gibe patience is dominated by an oligopoly, whichis beneficial to both firms and consumers. The collect firms are bothprice makers*, which is good for the limit firms, and price takers*,which is good for consumers.AimIn this investigation I shall be examining the figure industry. I willuse a Mintel report of the watch industry produced in 1995 andinformation worksheets to test my hypothesis.Findings and Application of TheoriesFive companies, or the C5 ratio, dominate the watch industry. Theyhave 40% of the market share* (see fig.1.). Zeon Ltd. is the marketleader*. in that location have been no recent take-overs or mergers in the watchindustry, so the market leadership is slight. The growth of theindustry has been organic*. GRAPHThis representation makes the watch industry an oligopoly , as debateto being thoroughgoing(a) competition*, imperfect tense competition, or a monopoly*.There are a number of reasons why the watch industry is an oligopoly.Firstly are at that place barriers to entry* as opposed to free entry*. Onebarrier to entry for other prospective watch manufacturers iseconomies of scale*. The larger, more established firms have a numberof toll advantages, such as being able to buy raw materials in deal orborrow large sums of money. Their production costs are thuscheaper and therefore they will probably be able to cover their watchesat a lower price than smaller, newer firms. Another barrier to entryis branding. All of the firms in the oligopoly have very establishednames in the... ...a novelty/ luxury item. The triumph of this strategy depends on maintaining low costs at low strength on a high quality image with few or no competitors.- Price Makers In a monopoly situation where there is only one, or very few suppliers. The industry can s et its prices at whatever direct they want without the chance of being undercut by competition (because there is none).- Price Takers In an industry where there is a lot of competition (ideally perfect competition), the sellers must have the prices of their product low in order to sell them. If they did not have low enough prices, customers would go elsewhere as there will be many substitutes that are cheaper.Bibliography1) The Watch Industry Mintel Report- 1995 (obtained from Sheffield Hallam Universitys Adsetts Centre)2) condescension and Economics class worksheets Is the Watch Industry dominated by an Oligopoly*, which is beneficial EIs the Watch Industry dominated by an Oligopoly*, which is beneficialto both firms and consumers?*= See glossary for meanings.Hypothesis==========I believe that the watch industry is dominated by an oligopoly, whichis beneficial to both firms and consumers. The watch firms are bothprice makers*, which is good for the watch fi rms, and price takers*,which is good for consumers.AimIn this investigation I shall be examining the watch industry. I willuse a Mintel report of the watch industry produced in 1995 andinformation worksheets to test my hypothesis.Findings and Application of TheoriesFive companies, or the C5 ratio, dominate the watch industry. Theyhave 40% of the market share* (see fig.1.). Zeon Ltd. is the marketleader*. There have been no recent take-overs or mergers in the watchindustry, so the market leadership is slight. The growth of theindustry has been organic*. GRAPHThis representation makes the watch industry an oligopoly, as opposedto being perfect competition*, imperfect competition, or a monopoly*.There are a number of reasons why the watch industry is an oligopoly.Firstly are there barriers to entry* as opposed to free entry*. Onebarrier to entry for other prospective watch manufacturers iseconomies of scale*. The larger, more established firms have a numb erof cost advantages, such as being able to buy raw materials in bulk orborrow large sums of money. Their production costs are thereforecheaper and therefore they will probably be able to sell their watchesat a lower price than smaller, newer firms. Another barrier to entryis branding. All of the firms in the oligopoly have very establishednames in the... ...a novelty/ luxury item. The success of this strategy depends on maintaining low costs at low volume on a high quality image with few or no competitors.- Price Makers In a monopoly situation where there is only one, or very few suppliers. The industry can set its prices at whatever level they want without the chance of being undercut by competition (because there is none).- Price Takers In an industry where there is a lot of competition (ideally perfect competition), the sellers must have the prices of their product low in order to sell them. If they did not have low enough prices, customers would go elsewhere as there w ill be many substitutes that are cheaper.Bibliography1) The Watch Industry Mintel Report- 1995 (obtained from Sheffield Hallam Universitys Adsetts Centre)2) Business and Economics class worksheets