Introduction
According to the mechanism of functioning, the following market structures are distinguished: the market of free competition, the monopolized market, the market of monopolistic competition, the oligopolistic market, and the regulated market. The selected company will be Apple, which holds a prominent position in the consumer electronics industry. As mentioned, all market structures are defined by three characteristics: the number of firms, the similarity of products, and the ease of entry and exit.
Number of Firms
The consumer electronics industry is vast due to the active development of technologies in this field. According to IBISWorld, there are 3915 Global Consumer Electronics Manufacturing Businesses (2022). Although such a large number of companies may cause ambiguity, it is worth noting that in this industry, the central part is occupied by monopoly companies, which occupy a prominent market position. Examples are companies such as Apple, Samsung, Sony, Xiaomi, and others (IBISWorld, 2022). Judging by the description of the situation presented above, the market of monopolized competition is most suitable because most of the market is represented by giants, with whom it is tough for most to compete.
Products Similarity
Regarding the similarity of products, a situation similar to the previous one emerges. It lies in the fact that the products produced by firms, in many cases, are not just similar but identical (Todd, 2018). Of course, this may sound like a strong statement, but if one disregards the details and subtleties, then devices of the same type produced by different companies perform nearly the same functions. In such a situation, the buyer pays more attention to the brand. Thus, the qualities of the monopolized competition market are revealed again (Zeuthen, 2018). In this case, large firms are in a winning situation at the expense of the brand, and basically, all the confrontations occur between them.
Ease of Entry & Exit
The ease of entry and exit in this industry can be briefly described. Given the above arguments about the competitive monopolization of the market, it is concluded that it is almost impossible to enter such a market. In a monopoly, large companies, in addition to producing products, are also engaged in retaining the audience (Zeuthen, 2018). Thus, young companies have practically no options for entering the market.
Exiting the market is also challenging due to the aforementioned attachment. Assuming a large company like Apple announces its exit from the industry and decides to enter the fertilizer industry, this will likely cause dissonance and resentment among consumers, accompanied by a decline in its shares.
Conclusion
Summarizing all the above arguments, the market structure of monopolistic competition applies to the consumer electronics industry. Considering all three characteristics of this industry, this structure is the most appropriate. In addition, it is worth noting that this industry is an example of market failure because the dominance of large companies ultimately stifles competition from young firms. After all, competition is a key component of the market.
References
Industry Market Research, Reports, and Statistics. IBISWorld. (2022). Web.
Zeuthen, F. (2018). Problems of monopoly and economic warfare. Routledge.
Todd. D. (2018). The World Electronics Industry. Routledge