Pricing and Non-Pricing Strategies in Different Forms of Industrial Organization
There are four basic models of market structure that exists today, namely, pure monopoly, oligopoly, monopolistic competition and pure competition. As such, within each structure is a unique set of characteristics that play a role in determination of pricing and non-pricing strategy for a particular organization. Over time different industries have evolved from a more primitive to a more competitive market structure to attain greater efficiency as dictated by the market forces as shown in the market structures simulation (University of Phoenix, 2008). This paper describes the pricing and non-pricing strategies being employed by different companies in their respective market structure, it also explains how Quasar Computers evolved through the market structures over time to take into account the changes in the aggregate number of suppliers as well as consumers.
Analysis of Pricing and Non-Pricing Strategies by Market Structure
Pricing and non-pricing strategies depend on the nature of the industry that a particular company operates in. This is mainly due to the characteristics that are associated with each market model such as number of firms competing, type of product (standardized, differentiated or unique), companies control over price, non-price competition if any, and based on conditions of entry in the industry.
Pure Monopoly
According to McConnell and Brue (2004), “monopoly is defined as a single firm producing one unique product in which there are no close substitutes” (ch.24, p.1, 2004). Pure monopoly markets are classified as a single seller, producer, or supplier of a product. Pure monopoly companie ...