Você está na página 1de 5

INTRODUCTION In todays market, we could see that there are many commercial organizations selling various kinds of items,

whether it is a distinctive items or general goods. When these firms and organizations are mostly profit motivated, and surely they are, most of them will tend to compete against one and another. This situation could be considered as one of the way for the organizations to become more appealing for their target consumers, and at the same time, more efficient in their stakeholders view as well. Competition occurs when two or more organizations are compete against each other in order for them to obtain their target customers and desired resources. Competition in free market system is a very common thing. Most of the firms compete to gain the resources that they wanted and attract their target customer in order to improve their profit as well. However, since there are various types of business involved in todays market, their competition might not be equally competitive with others. This is because they might lack of resources or a different market strategy creates different types of competition level in business. This is how the degree of competition in business occurs. The degrees of competition in business are divided into three main categories. They are monopoly, monopolistic and oligopolistic. In this case study, I am going to discuss about the degrees of competition that occurs amongst the shops at Ujana Kewangan shopping mall.

MONOPOLY In economics, a monopoly exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it (WIKIPEDIA). In order for an individual or organizations to become monopoly, there are several characteristics that need to be achieved by them, which are;

1. Single seller: In a monopoly there is one seller of the good who produces all the output. Therefore, the whole market is being served by a single firm, and for practical purposes, the firm is the same as the industry. 2. Market power: Market power is the ability to affect the terms and conditions of exchange so that the price of the product is set by the firm. Although a monopoly's market power is high it is still limited by the demand side of the market. A monopoly faces a negatively sloped demand curve not a perfectly inelastic curve. 3. Firm and industry: In a monopoly, market, a firm is itself an industry. Therefore, there is no distinction between a firm and an industry in such a market. 4. Price Discrimination: A monopolist can change the price and quality of the product. He sells more quantities charging less price against the product in a highly elastic market and sells less quantities charging high price in a less elastic market. (WIKIPEDIA)

Amongst all the shops and office lot that I have surveyed, there is only one organization that could satisfy all the characteristics above, and it is TM (formerly known as Telekom Malaysia). TM is the one and only land line telecommunication provider that are available in Malaysia. They offered internet surfing services such as STREAMYX, and the only firms that offers fibre optic internet package for people. They also provide basic telephone package for every people in Malaysia to call using landline telecommunication services. As the only landline telecommunication provider in Malaysia, they could change their price rate to a reasonable price based on the current market and suitability of their costs to provide the service. 2

OLIGOPOLY An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (WIKIPEDIA). In order for an individual or organizations to become monopoly, there are several characteristics that need to be achieved by them, which are; 1. A few large producers Usually three, four, or five firms occupy the market, e.g. "Big Three" in the U.S. aluminum industry and companies such as Nokia or Motorola in the cell phone industry, as well as companies in the video game console market. The four largest firms in the market occupy greater than 40% of the market. 2. Homogenous OR differentiated products Some oligopolistic industries offer homogenous, or standardized, products, e.g. those of steel, zinc, industrial alcohol. Other industries, e.g. those of automobiles, tires, offer different products and place an emphasis on nonprice competition, such as advertising. 3. Price maker, but still mutually interdependent The small number of firms let oligopolies to set prices and output levels, to some extent. However, because there are rival firms, oligopolies must take note at how they react to its change in price, output, product or advertising. 4. Relatively high entry barriers Entry barriers exist that allow a handful of firms to achieve economies of scales, but no more beyond that. Any new firms would have too small a market share and would have to produce at too high a price. Sometimes the cost of capital is too high and other times, ownership and control of the raw materials is a factor. Patents and brand loyalty are also barriers of entry into an oligopolistic market. ( Welkers Wikinomics)

As I was surveying the shops and firm at Ujana Kewangan, there might be some of them that suits with oligopoly characteristics. In my opinion, they are Maybank Berhad and CIMB Bank. The reasons why I choose these two organizations is because both of them are established, big organization that offers same kind of service, and they are competing against each other to attract more customers by setting their own, tempting rate that needs to be paid for each service that they provide. These two organizations also provide services that mostly similar such as opening account, investing and insurance. Only their rates and interests that make the difference and have to compete against each other. MONOPOLISTIC Monopolistic competition is a form of imperfect competition where many competing producers sell products that are differentiated from one another (WIKIPEDIA). For instance, a same type of product could have different kind of branding or quality that could differentiate them. In order for an individual or organizations to become monopoly, there are several characteristics that need to be achieved by them, which are;

1. There are many producers and many consumers in a given market, and no business has

total control over the market price.

2. Consumers perceive that there are non-price differences among the competitors'

3. There are few barriers to entry and exit. 4. Producers have a degree of control over price

(WIKIPEDIA) Amongst all the shops and office lot that I have surveyed, I could observe that there are lots of shops that compete in a monopolistic degree. Amongst all of them, textiles and fashion shops are the most obvious categories that involve in the monopolistic competition degree. Based on my survey, on every alley in Ujana Kewangan, there will be at least three different 4

shops that selling textiles, scarf and cloths. Among of them are Idaman textile and Zulkifli textile. Most of the textiles were identical, but the quality of each textile is slightly different based on the other textile shops. Even the price is not the same at every shop. Even though they are selling scarf and cloth that looks identical, and most of the customers thought the price will not have big differences, the prices of each textile are different; this might be due to the retailers that fix the price according to market suitability. CONCLUSION The nature of the product, or service, will itself affect the degree of competition. If it is difficult to make the product distinctive - by branding for instance - then it is known as a commodity product and competition is likely to be fierce. If we take the cases of electricity, gasoline, domestic gas, and mobile telephone services, we see that all of these are difficult to make distinctive about the only differentiator available is price. We can contrast that for almost every service and item we are selling, branding and other features available is crucial to make the product stand out from those that the competition is offering.

1. http://en.wikipedia.org/wiki/Monopoly 2. http://en.wikipedia.org/wiki/Oligopoly 3. http://welkerswikinomics.wetpaint.com/page/Characteristics+of+Oligopoly 4. http://en.wikipedia.org/wiki/Monopolistic_competition