Ous Said..

An oligopolistic market is one that has several dominant firms with the power to influence the market they are in; an example of this could be the supermarket industry which is dominated by several firms such as Tesco, Sainsbury’s, and Waitrose etc... Furthermore an oligopolistic market can be defined in terms of its structure and its conduct, which involve various different aspects of economics.

Oligopolies are a type of market structure evident in Australia, which is comprised of 2 or more firms having a significant share of the market. In an oligopoly the few firms sell similar but differentiated or homogenous products and is characterised by a large number of buyers making it a form of imperfect competition. This market structure is evident through the Big Four Banks, Phone Industry - Vodafone, Optus and Telstra.

Oligopolies have been around ever since there is trade. However, it has only recently gained grounds in this age of globalisation. Never before has oligopolistic competition been so fiercely contested across so many industries.

There are three factors that led to Solectron’s downturn in the early 2000s. First is the

New, high-tech product. Could be destabilized by introduction of much lower cost alternative in a few years.

Monopoly and Oligopoly are market structures in economics which are deemed to exercise market power within their characteristics in terms of market concentration and price determination.

The structure of a market is defined by the number of firms in the market, the existence or otherwise of barriers to entry of new firms, and the interdependence among firms in determining pricing and output to maximize profits. Retail sales are indicators of microeconomic conditions presented in a given area at a particular place in time. Since Sam Walton opened his first Wal-Mart store, Wal-Mart has been making ripples throughout the micro economies of America. Wal-Mart’s market structure is typical of most of our nation’s largest corporations in that they are an oligopoly (Brown, 2010). According to Colander (2010), “An oligopoly is a market structure in which there are only a few firms and

It has an additional manufacturing plant at Tanjung Malim, Perak. The company was set up on May 7 1983 as the sole national car company until Perodua came in 1993. Proton is a Malay acronym for Perusahaan Otomobil Nasional Sendirian Berhad (National Automobile Private Limited). In January 2012, DRB-HICOM take over the industry in transaction amounting RM1.2 billion. Proton has been used in Southeast Asia, China, Australia, Middle East, United Kingdom and South Africa. The Executive Chairman is Dr. Mahathir Bin Mohamad. The number of workers is almost 12 000 and the website that we can visit is (Proton Home, 2015).

The growth of Proton is in fact being characterised for its subsidies and protection . Preferential loans government have ensured that Proton would enjoy interest rate lower than available market and greater funding support than would otherwise be available . In other words , the company was only able to survive with the help of the government subsidies and tariffs which made other branded cars more expensive . However , this benefit doesn’t hold very long when the introduction of the Asian Free Trade Area ( AFTA ) is being announced . The policy would result to greater competition from foreign vehicles that are being produced with a much lower price and the losses in protectionist that was once provided by the government in maintaining the survival of the automotive company . In 2010 , their combined sales declined to 57.2% of the market . The drop in the domestic carmakers’ market share could be explained partly by the changes in the tariff structure , whereby it dropped when Malaysia began its commitment to reducing import tariffs under AFTA

According to Colander (2010), “An oligopoly is a market structure in which there are only a few firms and these firms explicitly take other firms’ likely response into account when making decisions.” Furthermore, given that

Over one hundred years ago in Germany and France the automotive industry has become a major source of industrial and economic stability worldwide. In this report we will describe how the auto industry is affected by new companies entering the market, mergers, and globalization, on pricing and the sustainability of profits. We will explore mergers and merger activity within the industry as well as current and expected government policies and regulations in place to address issues related to externalities. We will also take a look at the effects of global competition on the decisions made by management with regards to change in labor demand, supply, relations, unions, and rules and regulations in the auto industry. Considering the aforementioned topic on the auto industry’s competitive strategies and Government policies you will say that this report aims to explain how these two areas have impacted the auto industry and will affect it going forward.

Finally, to do the same in oligopoly we also need to understand the basic aspects of it. Oligopoly is the market share of several firms which together make a big influence to the price or other outcomes of a certain market, however the difference between monopoly and oligopoly is that in oligopoly firms do not operate independently, because then they could lose some of their customers to their competitors. That is why several dominant firms always try to cooperate together and sometimes they even make some secret agreements in order to maximize their profits. So, the dominant position in oligopoly is the market share of several dominant firms who have an ability to make big

The oligopoly theory is based on the importance of the number of firms in an industry as well as on the nature of a product. In oligopoly, the more similar or homogenous product of different firms is, the greater is awareness of the competitors. In all oligopolistic markets several sellers represent a substantial proportion of total sales. The fewness of the firms is a key characteristic of oligopoly. As a result of the limited amount of companies in the oligopoly industry, the main problem is hidden in the recognition of mutual dependence or interdependence of companies (Lipczynski et al.,

This is because, in comparison of Proton and Perodua, Proton is the one who facing the biggest problem. According to New Straits Times on 30 March 2017, Proton have received soft loans from the government around RM1.5 billion, yet they cannot increase their production nor sales. On 2016, Proton sales volume was at 72,290 units, while Perodua recording sales volume of 207,110 units. Also in 2016, while Perodua's market share was at 40 per cent, Proton recorded only 14 per cent. Even its revenue has consistently dropped from RM7.7 billion in 2013 to 4.8 billion in financial year

The second problem that Malaysian Automotive Industry is government policies. For many years Proton has been one of the most important GLC’s in