1. (1/2 page) Name a product that you regularly purchase from a firm that operates in an oligopolistic industry. Explain why the product and firm fit the model of oligopoly. Think about the TV commercials and/or print advertisements that you’ve seen from this industry: What interdependence have you noticed between the firm you selected and its rivals in terms of product differentiation, price leadership, or price competition? Explain your answer. 2. (1/2 page) Reply to two peers below with thoughtful responses: a. A product or service I would choose that operates in an oligopolistic industry would be T- Mobile, a cellphone wireless phone company. There are currently 4 top competitive phone companies that have been around the longest and quite powerful would be T-Mobile, Sprint, ATT and Verizon. The interdependence behavior can happen, in an example, when a company changes the price of a phone, the other companies will do the same. T mobile on the other hand has made a bold move, lowering prices, offering more bundle services and no contracts that would attract many customers. T- mobile has taken a price leadership based on this bold move, which has shaken the wireless telephone industry these past years. Product differentiation would be the process of distinguishing a product or service from others and making it attractive to a target market. An example would be when T- Mobile did a TV commercial, comparing itself to the other top three wireless phone companies and bashing or trash talking them in a quirky and savvy way to attract customers through humor. Delivering the service of having the most flexible, fastest 3g now 4g network and by offering low prices, no contract with unlimited data. b. Oligopoly in a market has high barrier of entry and few firms in the market. The market is controlled by these few large firms. A product that operates in an oligopolistic way is the Samsung company. This product fits the model of oligopoly because of its trademark and the amount of sales it has in the industry. Since there are only a few large cell phone industries in the market Samsung is aware of the competition, price changes, features and output level of the other companies especially its rival the Apple company. Based on the TV commercials of both company we can see how these two companies interdepend on each other to make their profits. When Samsung comes out with newest model of phone it promotes it’s product in commercials featurings it’s size, storage space, color, high resolution camera and so on. It’s rival does the same thing coming out with a newer and smarter version of iphone and adding a few additional features than the Samsung. This shows the interdependence of these two companies in terms of product and output. If Samsung comes out with a new product Apple does the same thing. If Samsung makes a trade in offer or lowers it’s price, apple will do the same thing promoting in price competition. This shows a dominant strategy in the market to compete against each other based on their personal interest and gains.
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