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Monopolistic Competition: Horizontal Vs. Vertical

Decent Essays
Product Differentiation Introduction A monopolistic competition is a type of imperfect competition that many producers sell products that are differennt from another. A way a business can grow is by setting themselves apart from the other companies through product differentiation. Product differentiation is a key element in monopolistic competition Product differentiation is the process of distinguishing a product from others, to make it more attractive to a target market. For most businesses, it provides a competitive advantage in a market dominated by larger companies. In today’s market product differentiation is used as strategies and can lead to both positive and negative effects. Horizontal vs. Vertical Product differentiation is a…show more content…
Stated in the previous section, product differentiation provides a wide selection of products or services in the market. Firms develop unique products to respond to the consumers’ preferences. Product differentiation gives the consumers different segments of the market a wide variety of goods to choose from. Jeans come in a wide variety of styles, colors, and fabrics. As trends come jean companies respect the fashion industry and what their consumers want and accommodate to their wants. To survive in the global competitive market, most companies keep inventing new products that enable them to remain relevant. Firms compete to create unique products or services that satisfy customer demands through differentiation. Companies can improve on existing products to make them more effective and attractive. Coca Cola founded its company in 1886, with its original recipe; however, due to consumers wants they also created diet, caffeine-free, and special flavored drinks. They created a unique line to enhance their original drink to attract more consumers. In the end, it proves to serve them well to have a wide variety of drinks because in 2016, Coca-Cola’s market cap was $192.80
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