Case Study Of Lonmin Oligopoly

Threat of entry is low because it requires large capital investments for a firm to startup and thus it can impede the entry of new firms into the industry. Lastly, it would be hard to break into the industry because the other firms already have economies to scale, are further along learning curve, and may have certain airspace leases that blocks out the new company from potential routes.

In assessing the market structure in which General Motors is operating in, I will outline the central assumptions and resulting implications of the oligopolistic market structure. I will study both the current competitive behavior of General Motors, as well as sales and cost statistics to determine whether they correspond to the characteristics of firms operating in an oligopoly. I will also examine the

Factors that can limit the threat of new entrants are known as barriers to entry. In this case barriers to entry are low because: there is no government intervention to prevent businesses from entering the industry, resources are abundant, and customers’ switching costs are low as well as fixed costs to start this type of business.

„« Barriers to entry are typically high, it requires a very large amount of money and expertise to enter the industry. The industry is consolidating not growing.

One barrier to entry in a market is research and development. Heavy investment into research and development from large firms can deter other firms from entering into a market. Research and development also goes into developing new products

Executive summary Rio Tinto is the largest extractor of natural resources and minerals in Australia and Canada. The Rio Tinto Group founded in 1873 by a global group of investors when they purchased a mine multiplex from the Spanish government. They focus on discovering and developing the earth’s natural mineral resources in a socially responsible manner through the method of transferring them into valuable and essential products grouped under products of: aluminium, iron ore, copper, energy products, diamonds, gold, salt and other minerals. Rio Tinto is a world leader in the mining sector where 90% of their assets originate from significant operations in Australia, North America and Europe but are also found to have significant operations

Endeavour silver is mid-level revered metals mining organization that processes three expensive arrangements, underground, silver-gold mines in Mexico. Since 2004, the organization has created from no generation to 9.7 million ounces of silver similar generation in 2006. We discover shape and perform quality silver mines in a socially, monetarily and earth punishable angle to develop genuine incentive for all shareholders.

The sophisticated nature and engineering process makes very hard for new player to enter the market, which limits the competition.

Small-scale mining is not an important public revenue-generating sector for the government at present because of its largely illegal nature. Viewed in a more positive light, the activity should become a solid tax base when fully licensed, given the large number of people and economic activities dependent on it.

To create a competitive advantage, a mine has to properly manage its exposure to gold price fluctuations. This is not an easy thing to do since there are so many factors to consider: when, how much, and how to hedge the gold production. Firms in this industry differentiate themselves based on the risk management strategies they implement. Furthermore, mines should also be able to minimize the cost of gold production along with making large sunk costs. Operating in

Rio Tinto is a multinational company that deals with mineral and metal mining, refining, processing, and marketing. Founded in 1873, this Australian-British company has grown into one of world’s leading mining and Metals Company, dealing in aluminium, copper, diamonds, coal, and iron ore. Refining of bauxite and iron ore are also part of its operations. The transformed metals and minerals give Rio Tinto access to markets across a diverse economic development spectrum, and exposure in varied sectors, including

New firm are unlikely to enter this market because in monopoly market it have high barrier such as economies of scale, patents, licenses, ownership of essential resources and other factors

The licensing formalities in this industry are quite high and thus the threat of new entrants is quite low (Duygun-Fethi & Pasiouras, 2009).

But even though the entry for small players could be easy, the entry for a large firm is not that easy. A high technical expertise is must for a new entry. The brand image of the large players who are most like acquire and retain customers also act as a barrier.

South Africa is regarded to have one of the world’s most unequal societies. Looking at Gini-Coefficients, “The dispersion of income and wealth between the rich and the poor is one of the most uneven in the world (Bisekker, 2010).” This means that South Africa is drifting towards perfect inequality. With job creation on a decline, unemployment steadily rising, and inequality gap worsening, the call for nationalisation by Julius Malema (2009) is sought to allow every South African to benefit from mines, which are owned and run by the State government. In nationalising the mining sector in South Africa, the State government believes it would have the capabilities of attracting labour-intensive mining industrialists who will process mineral resources and diversify the South African economy.