Travel Business Franchise and Market Structure

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My franchise operates in a markets characterized by a state of the monopolistic competition. Results! Travel competes in the travel business, helping customers sort out their travel options and booking travel for them. In this market, there are numerous competitors, but each tailors its service slightly differently. There are low barriers to entry, and all firms are in business to maximize profit. Lastly, firms in this market are typically not price takers, because they have the ability to reach consumers (Investopedia, 2012). These are the four basic characteristics of firms in monopolistic competition, and that therefore is the type of market structure faced by Results. There are a wide range of competitors in this market. Some firms also do travel planning, and this segment of the industry is highly fragmented. There are some chains still in the business and there are also a large number of independent operators. Some of the customer segments include vacationers and corporations. A lot of competition in this industry has migrated to the Internet. Results competes against do-it-yourself travel planning websites like Expedia or Hotwire, in addition to new startups that seek out different markets as a result of the highly heterogeneous nature of the industry (Gannes, 2010). There are a couple of ways for my firm to increase its market power. The first is by offering lower prices. Consumers in this segment are often price sensitive, so lower prices will entice new

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