Question

1. Identify an industry that is best characterized with the Monopolistic Competition market model. Explain in specific detail why you believe this industry is filled with monopolistic competitors. Specifically identify one company in the industry you have selected and describe (again, in specific detail) how this company competes ON A NON-PRICE BASIS within its industry.

Answer 1

Answer:

Monopolistic Competition market model:

A Monopolistic competition market is a type of market structure wherein there are numerous competitors,

however, each one sells a product which is a little different from the other.

Industry that is best characterized with the Monopolistic Competition market model:

The fast food industry can be best characterized as monopolistic competition market model, because there are many fast-food firms such as McDonald’s, Wendy’s, Burger King and many more.

All of these firms produced more or less similar food items such as fries, burgers, desserts, and soft drinks etc.

Chosen industry is KFC:

For this , I have chosen Kentucky Fried Chicken Corporation, USA.

It was founded by Colonel Harland Sanders in 1952.

It is the first fast-food firm to expand internationally and stands second to McDonald’s.

Currently, KFC has over 22,600 global units in 140 countries.

It is truly a global chicken restaurant (yum.com).

This company competes on a NON PRICE BASIS within its industry:

Explanation:

Some of the factors on which KFC competes are:

1.firstly the taste and quality of its fried chicken.

It claims of using fresh chicken and spices which are mixed by hands instead of machines.

KFC maintains its originality across the world whether one is in the USA or in Thailand.

Therefore, despite so many upcoming firms in the fast-food industry as it has no barrier to entry.

KFC has stood out in having a good number of the loyal customer base.

2.Secondly, in order to cope up with the competition, it provides a industry that is best characterized with the Monopolistic Competition market model

Such promotions have enabled it to stand the pressure of competition over the years.

3.Thirdly, it has a well-developed marketing strategy.

For instance, its own very tag line ‘so good’ stands true to its claim as to when one thinks about fried chicken, one cannot stop thinking about KFC.

Therefore, KFC can be categorized within a monopolistic competition market.