Microsoft (Oligopoly) (Essay Sample)

Microsoft (Oligopoly)
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Microsoft (Oligopoly)
Microsoft Company operates as an oligopoly. This means that Microsoft operates in a market where there are fewer producers and thus, it has the capacity to control or to direct the market moves in one way or the other depending on the strategy the company employs. Therefore, oligopoly market structure can be described as the individual company way of reaction (behavior) in respect to the market moves rather than the expected market structure reactions.
Microsoft company is a price leader (sets prices), and therefore dictates the prices of good and services offered in the technology industry. Although they have to take into consideration the reactions of other leading firms that have grips in the industry, small companies in the same field are forced to take up the prices as their influence dose not determine the oligopoly market direction. Competition in this market structure is minimal as the few big companies in the industry continue to make big profit margins irrespective of the new market players with different pricing strategies. If the price of one product is changed by one company, other companies in the oligopoly structure are supposed to counter the move for them to remain relevant in their business. A shift of price downward effected by one company forces the other companies to shift their price downwards or offer other enticing offers on that particular product in order to retain their customers.
In order to survive stiff competition in the oligopolistic market structure, Microsoft Company employs a non-pricing strategy. These strategies include free deliveries and installation to their customers. At the same time, the warranties given by this company are extended therefore securing confidence from their customers and more sales are made in return. Regular rebranding of their products and extended marketing strategies are fully utilized to maintain stable and repetitive business with their customers. Diversification...