Advantages And Disadvantages Of Duopoly (Essay Sample)

Introduction

In a certain market, duopoly is a form of oligopoly that exists within a target market. This is specifically focused on two main corporations that dominate the community’s economic interest. An example is the presence of two dominating conglomerates that are known for their mall chains across the society. The public or the target markets generally respect their presence due to their effective and accurate marketing advantage as well as the quality of the service that they have been implementing with each other. If a certain target market valuably respects the presence of a certain dominating corporation, this means that the management and marketing advantage is consistent with the operational framework of the institution. In this case, the value of the marketing directives makes it important for the company to continue their operations.

The advantages of oligopoly are the limitation of other companies to operate in the same target markets due to their effective and effective commodity advantage that makes a household item to the community. This means that oligopoly signals consistency with the operating company due to its efficient marketing advantage. Having an efficient form of duopoly enhances business environments to have a more relaxed way of operating their business because there is a less or limited competition that exists within the similar target market. Consumers will have to consistently continue their patronization of the products, which is helpful for the dominating companies to continue serving their regular target markets. In addition, the two companies will no longer have to worry about the market competition between the two because they are the only dominating companies who are able to offer products and services to their consumers.

The disadvantage of duopoly is the limitation of product choices to the target consumers because they can only choose two products that are only provided by the company. As a consumer, you want to have different choices of commodities or services to satisfy your basic needs. In terms of food, consumers are only limited to choose between the two brands that offer similar products. Dominating companies have the power to introduce a bureaucratic way of preventing other companies to enter similar target markets. The reason behind is that the dominating companies does not want their brand to be challenged by the new brands entering similar markets. Corruption allegation takes place between the involved companies operating in a similar target market. The executives are able to bribe public officials of the local government units to prevent other companies to establish their new startup companies in the same community.

As for the implication, it has been learned that duopoly signifies the existence of two brands known as the most patronized by the target markets. Marketing situation becomes difficult for other brands to penetrate a community that has been dominated by two major companies. The reason behind is that outside companies must have to establish the trust of the consumers that will pave the way to open new opportunities to choose new products from different brands to fulfill their needs. Local government units are responding against companies promoting bureaucracy because they provoke inequality for other companies to establish their businesses. Companies who are involved in bribery allegations are investigated and at risk for having their business permit suspended by the local government unit responsible for regulating the business of major companies (Kramer-Miller, 2013).

Reference

  • Kramer-Miller, Ben (2013). “Norfolk Southern Corp. Looks Like A Solid Investment”. Seeking Alpha
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