As part of this project, we have selected the consumer apparel and footwear industry, which is represented by Nike Inc.
About the company
Nike Inc. is an American multinational corporation that designs, develops and markets sports footwear, apparel and accessories under its brand name. The company was founded in the year 1964 as Blue Ribbon Inc. , but was then named as Nike Inc. in 1970. The company is listed on New York Stock Exchange, under the ticker symbol of ‘NKE’, and is headquartered in Beaverton, Oregon. The dominance of the company in the industry can be cited from the fact that its brand sign ‘SWOOSH’ is valued at $19 Billion. (Profile: Nike Inc)
Market Structure
Nike Inc. operates as monopolistic market structure. Important to note, this form of …show more content…
Number of Sellers Very large num¬ber of sellers Single seller Large number of sellers Few Big sellers
2. Nature of Product Products sold by the sellers is identical Product sold by seller is unique and bears no close substitutes Very closely related and good substitutes of each other Products are homo¬geneous under Pure Oligopoly and differentiated under Differentiated Oligopoly
3. Entry and Exit of Firms Firms are free to enter and exit There is a strict barrier of entry and exit in the industry Firms are free to enter and exit There is a strict barrier of entry and exit in the industry
4.Demand Curve Firms face perfectly elastic demand curve Firms face downward slop¬ing demand curve, but less elastic than perfectly competitive firms Firms face downward sloping demand (but more elastic) Demand curve is kinked
5. Price Each firms is the price taker Firm is a price- maker. So, price discrimination is possible. Each firms decides its pricing policy as part of its product differentiation strategy Price rigidity due to fear of price