Market Structure Analysis of McDonald's

652 Words Feb 3rd, 2018 3 Pages
They can also be defined as the characteristics and organization of a specific market in which a company conducts its business. While there are normally four kinds of markets, markets can be classified based on their degree of pricing and competitiveness. As one of the leading fast food chain restaurants across the globe, McDonalds Corporation operates in an oligopoly type of market.
McDonalds Oligopoly Market Type: An oligopoly market is one that is characterized by the dominance of few large or small firms in a specific industry or market with limited competition ("Market Structures", n.d.). Companies within an oligopolistic market collude implicitly or explicitly to restrict or prevent other competitors from entering the industries or markets through the establishment of hindrances to their entry. One of the major reasons for McDonalds' operation in this kind of market is because the fast food industry in the United States is an oligopolistic market or industry. The fast food industry or market in America consists of few firms that are price makers with interdependent policy actions. Due to the oligopolistic nature of the fast food industry and market, McDonalds Corporation is able to establish its own effective decisions because of the knowledge regarding its competitors and…
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