Woolworths market structure

A year of challenge and transformation. We are experiencing rapid technological change, altered customer behaviours, and a globalisation of retail competition. We are clear that we need to recognise these challenges and build a future-fit business that will be very different to the one of the past. Retail is in the midst of significant structural and cyclical change in the markets in which we operate.

Woolworths market structure

INTRODUCTION

Introduction The oligopoly market is defined by the existence of a less number of sellers in Woolworths market structure market, selling products which are close substitutes of each other. Where there exists intense price rivalry in the market. Analysts and researchers have spotted a similar pattern in the Australian food retail market.

The Oligopolistic nature of the market is evident from the study. The paper examines the existence of the Oligopolistic competition in the Australian food retail market and as well examines the impact of the recent price wars strategy followed by the food giants and its impact on the players in the economy.

Monopolistic Nature of the Market The oligopoly market is defined as the presence of a few sellers in the market that sells products which are close substitutes of each other.

Woolworths market structure

Oligopolistic market has a distinct product differentiation and often is found selling branded products where the distinction is creating through various advertising methods is very important. An oligopoly has the features that have been discussed below.

The Australian food retail sector has continued to grow and has emerged as the one of the main pillars of the Australian economy.

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The industry has developed with the emergence of a few players indicative of an oligopoly market. The Australian retail sector developed with the rapid increase in the demand for food products and the availability of the products for consumption to the consumers. Shares of Australian food retailers in Source: This high profit margin is an indicator of the dominance of the two over the sector.

Ever since there has been no entry of a major food player in the Australian retail market, identifying the existence of barriers have continued to exist. Despite the globalization and global companies looking for new markets no player has merged in the Australian food retail industry.

Woolworths market structure

Thus high cost structure for the entry is evident in the Australian food retail industry. The sector has proved to be highly profitable over the years experiencing a steady rate of growth.

The projects have resulted in effective and efficient supply chain management over the years. Price Wars A market is an Oligopoly market arrangement when the actors in the market like the firms; practice a certain degree of price competition among them.

The price wars affect the profitability of the firm; In an oligopoly the price wars can have a detrimental impact on the firms as it creates deflationary pressures on the business. Many have concluded that such price wars and the duopolistic nature of the market threaten the interests of both farmers and consumers.

The market structure gives power to the retail giants to exercise powers on the various sectors of the economy particularly farmers and consumers knowledge. The Chamberlin Equilibrium current market is equilibrium is shown in the figure below. Equilibrium in an Oligopolistic Market in this a Duopoly Source: ChauhanThe oligopolistic market is in equilibriumThe above figure represents the AR curve faced by the duopolies ,The point where the corresponding MR curve intersects the marginal curve MC the equilibrium in the duopoly is reached at the equilibrium quantity of Qm is achieved at the corresponding equilibrium price of Pm.

The figure first represents the equilibrium when duopolies A is in the market, now suppose that a firm B enters the market, thus the corresponding quantity supplied by the firm is Qb and the corresponding price set by the firm is Pb. The price set by firm B is lower than firm A, therefore firm B stands a chance to lose the profit maximization levels by supplying higher quantity at lower price.

Therefore, on the other hand the firm B stands to gain consumers by supplying at lower price because applying the simple demand rule.

Such an equilibrium condition is called Chamberlin equilibrium ChauhanWoolworths Financial Services (Pty) Ltd (Reg. No //07) An authorised financial services (FSP) and registered credit provider (NCRCP49). Woolworths Market Structure.

1. Characteristics of the four market structures. [monopoly, oligopoly, monopolistic competition, & perfect competition] 2. Know the four types of monopolies. The WHL Group consists of three main operating companies, Woolworths Proprietary Limited (Woolworths), David Jones Limited (David Jones) and Country Road Limited (Country Road Group).

Woolworths Financial Services (Proprietary) Limited (Woolworths Financial Services) is a joint venture with Barclays Africa Group. The market environment of Woolworths.

Woolworths existing target market is the high income earners and the LSM (living standard measure) group 8 to Woolworths is also planning to target two markets like the lower LSM groups and the growing black middle class, because in a few years’ time they will be buy food and clothes from stores.

Market Structure Woolworths operates in an oligopoly market structure. In the supermarket industry, there are two supermarket giants of Coles and Woolworths that dominate most of the market. Jun 13,  · One of the best known duopolies (an oligopoly with only 2 firms) in Australia is that of supermarket giants Woolworths and Coles.

Together they account for about 80% of the supermarket industry in Australia.

Woolworths Group: Quality Brands and Trusted Retailing