Oligopoly Market

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Introduction As we can see, this assignment requires us to have an understanding on the oligopoly market, which is one of the most sought after market condition which is being applied in many sectors, including banking, airline and car industry. Many large organizations are involved in merger and acquisition to strengthen its position besides expanding their market share. As example, Hong Leong Bank completed a takeover on EON Bank to consolidate its position as one of the major bank in Malaysia (Bloomberg, 2011). Oligopoly market is defined as a market that consists of a small number of large players (Begg & Ward, 2009). In Malaysia, airline and banking industry are two industries that have small numbers of large players. As we can…show more content…
Today, AirAsia has flown over 55 million guests across the region and continues to create more extensive route network through its associate companies. Its affiliate airlines Thai AirAsia and Indonesia AirAsia have hubs in Suvarnabhumi Airport and Soekarno-Hatta International Airport respectively (AirAsia, 2011). AirAsia believes in the no-frills, hassle-free, low fare business concept and feels that keeping costs low requires high efficiency in every part of the business. Through the corporate philosophy of “Now Everyone Can Fly”, AirAsia has sparked a revolution in air travel with more and more people around the region choosing AirAsia as their preferred choice. AirAsia won the Skytrax World's best low-cost airline award in 2009, 2010 and 2011 (Skytrax, 2011). It has the world's lowest operating costs at $0.035/seat-kilometre in 2010. It is also the first airline in the region to implement fully ticketless air travel system. Is Airline Industry in Malaysia considered as Oligopoly Market? As we go through further in this assignment, a question will remain in our mind, whether airline industry is an oligopoly market. It is important for us to understand the characteristic of airline industry to have more understanding on the market. Based on the characteristic of oligopoly market, it stated they produced homogenous or differentiated products. We could see that AirAsia is differentiating themselves through low cost, even
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