An Analysis of China’s Retail Market of White Goods

1015 Words5 Pages
An Analysis of China’s Retail Market of White Goods ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Highlighting the oligopoly of Suning and Gome

By: Chang Nianzhi, An Baichun Section: 104BA Dec.15, 2012

Oligopoly

1. Share of the market
An obvious development in the retailing market of household appliances in China is the growing oligopoly of Suning Appliance
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As a result, Suning chooses low pricing. On the other hand, if Gome chooses low pricing, then Suning choose low-cost strategy in order to gain the greater profits. So, regardless of Gome chose the high-priced strategy or low-cost strategy, Suning will cut prices. Gome will face the same situation when deciding to charge high price or low price. As a conclusion, no matter Suning choose high price or low price, Gome will choose the low-price Strategy. Ultimately, both choose low price can be seen from the payoff matrix that their profits are 70. After the vendors this turns lower prices after the price war, the market price will be reduced to a very low level, and then each vendor will lose heavily. So to conclude: If Gome and Suning take high-priced policies, their income will increase, they will get 100 earnings.
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