Market structure is the characteristics and organization of a market and is the main factors that determine a product’s pricing and competition ( Head & Spencer, 2017) . They include monopoly, oligopoly, imperfect competition, and perfect competition. Perfect competition is a market structure in which multiple small firms compete against each other. Monopolistic is whereby large businesses compete against each other. Oligopoly is whereby few companies control the market structure. In this structure, the firms can either collaborate or compete against each other ( Head & Spencer, 2017) . Monopoly, on the other hand, is whereby one firm dominates the whole market. Thus, from the above analysis, the best market structure for the Apple iPhone 6 plus is an oligopoly. The market is majorly dominated by few iPhone companies that comprise of Blackberry, Samsung, and LG. Other notable rivals include Erickson, HTC, and Nokia.
The above competitor’s set the price of the products and has a significant influence. According to Chen and Ann, (2016) t he influence is majorly on pricing with any increase by a company will result in other companies increasing their prices. For example, if Samsung lowers the price of its Smartphone, they will post a high profit due to high demand. For other Smartphone makers to enjoy the lucrative market share, they will have to bring down their prices. Firms within an oligopoly market structure enjoy a collective control of prices in the market. According to the characteristic of the market, a company that lowers its prices will not enjoy the high profits due to a level playing field created by other firms ( Chen & Ann, 2016) . Thus, Apple will have to conform to the market’s pricing to avoid losing control of its demand. When Samsung released its Samsung Galaxy s4, it led in sales and demand in the market. Since then, the company has continued to dominate and lead in sales and a particular emphasis in producing numerous Galaxy series.
Delegate your assignment to our experts and they will do the rest.
Apple’s new release is set to destabilize Samsung’s dominance. Customers will mainly be affected by taste and preference with the demand increasing due to strategic marketing campaigns and popularity brand ( Fan & Yang, 2016) . To counter any competition, Apple will be forced to increase the supply of iPhone 6 plus in the market. As compared to other rival brands, iPhone 6 has a more significant internal memory and screen size, pointing to higher demand from customers as compared to prior iPhone versions. It is critical to note that in such a market structure, no competitor engages in price discrimination.
References
Chen, C. M., & Ann, B. Y. (2016). Efficiencies vs. importance-performance analysis for the leading smartphone brands of Apple, Samsung and HTC. Total Quality Management & Business Excellence , 27 (3-4), 227-249. http://192.192.83.167/ir/bitstream/987654321/1323/2/Efficiency_vs._IPA(Total_Quality_Management).pdf
Fan, Y., & Yang, C. (2016). Competition, product proliferation and welfare: a study of the US smartphone market. Available at SSRN 2506423 .
Head, K., & Spencer, B. J. (2017). Oligopoly in international trade: Rise, fall and resurgence. Canadian Journal of Economics/Revue canadienne d'économique , 50 (5), 1414-1444. https://www.nber.org/papers/w23720.pdf
