Now I describe about the market structure

such as monopoly and oligopoly, market

forces shape organization responses, the
business and cultural environments, the
significant of international trade to UK
business organizations, the impact of global
factors on UK business organizations, and
the impact of policies of the European Union
on UK business organization.

Monopoly
The word monopoly has been derived
from greed words Mono+pollein which
means single control.
Monopoly is a market situation in which
there is a sole(single) producer of a
commodity which has no close substitutes.
In monopoly there is only seller of the
product he has full control over its supply.

Monopoly

One firm
Unique product
Blocked entry
Market power
- Price maker
Examples
- Local untilities

Monopoly
A monopoly is simply a market with only one seller and no
close substitutes for that seller's product. Technically, the
term "monopoly" is supposed to refer to the market itself,
but it's become common for the single seller in the market
to also be referred to as a monopoly (rather than as having
a monopoly on a market). It's also fairly common for the
single seller in a market to be referred to as a monopolist.

Oligopoly
A few large firms
Standardized or
differentiated
products
Market power
- Interdependent
Examples
- Steel, oil
- Automobiles

Oligopoly
Oligopoly is a market structure characterized by a
small number of relatively large firms that
dominates an industry. The market can be
dominated by as few as two firms or as many as
twenty, and still be considered oligopoly. With
fewer than two firms, the industry is monopoly. As
the number of firms increase (but with no exact
number)
oligopoly
becomes
monopolistic
competition.

Monopolistic competition

A large number of firms

Similar but differentiated products
Low barriers to entry
Market power
- Limited
Examples
- Restaurants
- Hotels

KEY FEATURES OF OLIGOPOLY

*A few firms selling similar product
* Each firm produces branded products
* Likely to be significant entry barriers into the
market in the long run which allows firms to
make supernormal profits.
* Interdependence between competing firms.
Businesses have to take into account likely
reactions of rivals to any change in price and
output

Market Forces
We can see the two business organization
such as Coke and Pepsi. These companies
have responded to the same market forces.

Especially Oligopoly market structure have the price competition.

THEORIES ABOUT OLIGOPOLY PRICING

(1) Oligopoly firms collaborate to charge the monopoly price and get monopoly profits
(2) Oligopoly firms compete on price so that price and profits will be the same as a
competitive industry
(3) Oligopoly price and profits will be between the monopoly and competitive ends of the
scale
(4) Oligopoly prices and profits are "indeterminate" because of the difficulties in modelling
interdependent price and output decisions

Three
Structures

Market

Oligopoly is one of four

common market structures.
The other three are: perfect
competition monopoly, and
monopolistic competition.
The exhibit to the right
illustrates how these four
market structures form a
continuum based on the
relative degree of market
control and the number of
competitors in the market.
In the middle of the market
structure continuum, near
the right end, is oligopoly,
characterized by a few
competitors and extensive
market control.

Market Structure

Business Environments

The term Business environment is

composed of two words Business and
Environment
- The word Business is its economic sense
means human activities like production,
extraction or purchase or sales of goods that
are performed for earing profit.
- Environment refers to the aspects of
surroundings.

Business environment
We can divided business environment into two
parts: External and Internal.
External business environment is a set of
(PEST) ;
Political
Economic
Social
Technological

Internal business environments

Internal business Environment is the set of
elements or forces which affects a
organizations or firms behavior.
Examples are;
Personnel
Finance
Marketing
Production
Operational research and so on

Cultural Environment
The activities of humans and their
relationship with their environments now and
in days of old are visible in cultural
environment.

Cultural Environment

The significance of international trade to UK

business organization

The United Kingdoms economy is

depended
on
foreign
trade. The
government
also
supports
the
international trade such as the World
Trade Organization and the EU. Of the
Kingdoms 500 largest corporations, 60
are American. The United Kingdoms main
trade partner is the EU.

The significance of international trade

to UK business organization

The 58 percent of the United Kingdoms

exports go to EU nations,12 percent of
exports to Germany, France with 12 percent,
Netherlands with 8 percent and the United
State with 13 percent. The United State
provides 14 percent of the Kingdoms
imports. Germany provides 13 percent,
France 9 percent, Netherlands 7 percent
and Italy 5 Percent respectively.

The significance of international trade

to UK business organization

The United Kingdom is the worlds

second-largest destination for investment.
In 1997, the investment of Kingdoms is
US$138.8 billion.
Foreign companies provide 40 percent of
exports. In 1998 there were 25,800 foreign
companies in the United Kingdom.

For examples;
Germany is not a big country, if a company
wants to earn more money, the only way is
increasing the market through international
trade.
BMW have their business all over the world.
political factors
environmental factors
social factors
technological factors
economic factors
legal factors

The global factors that influence the UK

business organization

Politics
Economy
Society
Technology

Political
Political change- regime change through
coup, violence, etc. Change in
government through democratic election
can influence future business strategy.
Political Uncertainly- political uncertainly
can lead to a fall investment by business
and influence decisions on expansion and
business ventures

Economic
All these factors need to be considered in
any business:
- Tax Systems
- Investment Considerations and
Allowances
- Commodity prices- oil, energy etc.
- Monetary and Fiscal policies- interest
rate, government aid
- International Regulation and
Bureaucracy
- Exchange Rates

Social
Regligious
Considerations, eg.
selling condoms in
staunchly Catholic
countries
The impact on the local Impact on the
environment not only
environment can impact
affects human
on the businesses image
communities but can also
Ethical considerations
cost inflict widespread
Cultural issues
ecological damage.

Technological
Availability and developments in
technology can have a powerful influence
on global business strategy:
e.g.
- Access to bandwidth
- PC ownership
- Technology and sales- processing
payments and sales
- Compatibility of

The impact of policies on the UK

business organization
- Over all economic policy
organization's market demand, cost of
finance,and taxation.

-Industry policy
protection v free trade, Grants, sponsorship,
investor protection, capacity

-Environment and Infrastructure policy

Distrubution

-Social policy
Workplace regulation, employment law,
Labour supply, skills, education
-Foregin policy
Trade pomotion, export credits EU and
WTO obligation, export pormotion to
allies

Here are some example of the way in

which the policies influence the
business today;
1. Empolyment policy
2. Regional policy
3. Inflation policy
4. Education and training policy
5. Taxation policy
6. International policy

The impact of policies of the European Union on

UK business organization

Small business
Small business are disproportionately
affect by regulation. According to the
European Commission, complying with
regulations can cost a small business 10
times as much per employee as it costs a
large company.