Running head: DIFFERENTIATING BETWEEN MARKET STRUCTURES IN BUSINESS 1
Differentiating Between Market Structures in Business
ECO 365
January 11, 2016
Gaminie
DIFFERENTIATING BETWEEN MARKET STRUCTURES IN BUSINESS 2
Differentiating Between Market Structures in business
There are always those one or two major companies within every industry that stand out and
pave the way for the rest of the industry to follow. Then there are the businesses that have
multiple companies that are in competition for market share, which are referred to as a market
structure. In the Grocery industry, Wegmans is a front runner company that is slow taking over
the. I am going to discuss Wegmans and show the market structures in business. Wegmans was
founded and started in Rochester New York around 1915 by brothers John and Walter Wegman.
In the last 100 years of being a company, Wegmans, which began as a Fruit & Vegetable
Company, has now grown into a monopolistic competition within the grocery industry.
According to Coricelli, F., Cukierman, A., & Dalmazzo, A. (2014), “Monopolistic competition
occurs when several different companies are competing for the market share of similar products”.
Low barriers are present but having no obstacles to entry can mean it is easier for a startup
business to enter the marketplace and become a reliable competitor. The companies associated
with the grocery industry all have comparable products they sell and provide a solid effort to
their product diversity. These products that are commonly known to provide a high elasticity of
demand, which means the consumers will have a variety of substitutes to choose. If Wegmans
decided to raise their pricing on selected product, the consumer in a monopolistic competition
market can effortlessly locate an alternative product in the local community (Coricelli 2006).
That is what separates monopolies from oligopolies, which oligopolies normally have a limited
number of competitors.
DIFFERENTIATING BETWEEN MARKET STRUCTURES IN BUSINESS 3
Even though price competition rarely occurs, market structures still should practice product
diversity. Thus, market competition within oligopolies significantly differs from the perfect
competition, since oligopolies suffer a higher level of competence. The grocery store industry is
an excellent sample of monopolistic competition since the buyer has many options to decide
from when purchasing groceries. There are many reasons as to what the consumer buying
choices are; location of the store, the price of a product, customer service and loyalty to a brand.”
In an average size city, most consumers will have many different grocery stores within a short
