Types of Market Environments and the Internets Affect

907 WordsDec 9, 20084 Pages
When determining what type of market environment that businesses operate within today, one must decide what segment of the market is being targeted. Whether it is the agricultural industry, the retail sales industry, the automotive industry or the utilities industry, each market has its own type of business environment that it operates under. In recent years, the emergence of the Internet has shifted the balance of power in most industries. In order to explain today’s market environment clearly, it is better to break down each type of market environment. Pure competition is the most consumer-friendly type of business environment. This is due to abundant amounts of information and resources that the consumer has to choose from before…show more content…
There are few sellers but endless abundance of buyers. When one seller decides to alter their pricing strategy, it will affect its competitors to alter their strategies. Apparent today with the U.S. automotive industry however, due to their unwillingness to change with their competitors overseas, the “Big 3” General Motors, Ford, and Chrysler have fallen into financial peril. The Internet changed the way some industries that were once extreme oligopoly operate. The music industry which was once dominated by a handful of companies has new competitors in the market. Most businesses in the U.S. do not operate in a complete monopolistic environment due to regulation by the government. Without government regulation, monopolies could charge whatever prices they choose as long as there was a demand for the product. Utilities companies are the best example of a monopoly since there is typically only one electric company and one water company for a particular area. The Internet has little influence on the businesses in a monopoly environment. Most businesses operate in some sort of competitive market environment. The level of market penetration, ease of entry into and exit from a particular industry and level of control over the product pricing determine the classification of market structure. The growth and expansion of the Internet has changed the way many industries do their business today. The Internet has increased competition in most business

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