Manufacturing Industry
In mobile phone manufacturing industry, there exist 12 major manufacturers that operate all over the world. Their products reach people all over the world. This means that there are a limited number of manufacturers. This is why the industry can better be said to be of oligopolistic structure. In an oligopoly, few firms in the market sell similar products that are differentiated.
Even though there are different models for the industry, the major function of a mobile phone is to make calls and send texts. Differentiation is what makes some cell phones be used in other activities. The differentiation strategy unable different manufacturers to charge different prices. The price charged by the market leader influences the prices that the other companies will charge. Failure to adjust prices accordingly may lead to losses. The market structure enables companies to do a lot of marketing as a way of increasing competitive advantage. The customers and producers have perfect information because each can search information about the market from the internet (Tool and Samuels, 1989). Evaluating the above information, one confirms that it is true that the market has an oligopolistic structure since it has many features of this structure.
The ever increasing level of competition makes various manufacturers to develop strategies to use in differentiating their products. Apart from the standard functions of the mobile phones, companies add features that meet certain needs of the customers. With that, the products are differentiated, and they can now charge a premium for the new applications. Companies also differentiate themselves by making their cell phones be of higher quality. An example is the phones with long lasting batteries.
Another strategy is through advertising. It reaches information to the customers regarding a certain brand. The information communicated through advertising may make the phones appear to be better. Generally, differentiation involves innovative skills to convince the customers that they should buy a certain brand.
Reference
Tool, M. R., & Samuels, W. J. (1989). The Economy as a system of power. New Brunswick, N.J., U.S.A: Transaction Books.
