Equate is a Walmart-owned brand that is engaged in producing and selling medicines and beauty products. The goods of this label include pain relievers, anti-allergic drugs, skin and hair care cosmetics, vitamins, and other products in this category (“Quality care begins here,” 2020). The industry is competitive, and individual market participants are recognized leaders in terms of revenue and sales. In the US, the top companies in this market niche are Vigon International, Libby Labs, and Markwins, each with tens of millions of dollars in annual profits (“Top manufacturers of cosmetics,” 2021). Due to long-term work in their segment, these companies have achieved great success. This explains high competition and the desire of other participants to attract the target audience, which, in turn, creates a broad offer and high market concentration. At the same time, products in the pharmaceutical and cosmetics industry are homogeneous to a large extent due to the fact that identical goods are in demand, and the range is limited.
One of the key barriers to entering this industry is high competition. This creates the need to provide consumers with goods at lower prices, which, in turn, may be impossible for many manufacturers due to production, delivery, and other costs. Oligopoly is the market structure of this industry, and the dominance of individual participants is a deterrent to other companies in this profile, including Equate. According to Chung and Kwon (2016), oligopolistic competition affects business strategy and performance because it “drives price and demand fluctuations” (p. 117). Regarding Equate, the brand has to price its products below market standards to ensure stable demand and retain consumers. The existing market structure drives anticompetitive behavior since firms seek to circumvent high competitive barriers through such practices as mergers, price discrimination, and other approaches. Therefore, the oligopolistic structure is unstable and characterized by restraints and restrictions.
References
Chung, S. H., & Kwon, C. (2016). Integrated supply chain management for perishable products: Dynamics and oligopolistic competition perspectives with application to pharmaceuticals. International Journal of Production Economics, 179, 117-129. Web.
Quality care begins here. (2020). Walmart. Web.
Top manufacturers of cosmetics in the USA and worldwide. (2021). Thomas. Web.