Maximizing Profits Within Markets

Maximizing Profits Within Markets

University of Phoenix

ECO/415

Submitted 8/6/2012

Maximizing Profits Within Markets

The goal of any company no matter what industry is to maximize profits. Different companies have different approaches and strategies to maximize their profits, but one major factor is the market they are in or trying to enter. Most companies form their basis on a particular structure then build and branch off of that. This results in entering different markets and developing new strategies to maximize profits. There are four main types of market structures, which will be discussed in further detail within the paper. Furthermore, which market structure a company is in will ultimately shape its business strategy for maximizing profits. Team A has chosen Starbucks Coffee Company to show how market structures work and alter the behavior of individual companies. Starbucks started out as a basic coffee shop, and has now built itself into a multinational successful company. They do not just sell coffee anymore. They now have an entire online store with various items, and they continue to expand. As they expand, they open the opportunities to enter into new markets. They have successfully maximized their profits throughout the years and do not seem to be slowing down anytime soon. Team A will determine which market structure Starbucks is in as well as discuss its profit maximizing strategies and how they plan to remain a successful company.

Differences between the four market types

Market structure is the connected features of a market; for example, the amount and power of buyers and sellers, their amount of involvement, and consent. It also includes the level and types of competition, product differentiation, and the level of difficulty of entering and exiting the market. There are four basic market structure types: monopoly, oligopoly, perfect competition, and monopolistic competition.

The first market...