The firms that we had selected for this assignment are Perodua and Toyota. The market structure of both of the companies can be classified as the oligopoly. One of the characteristics of oligopoly is there are only a few sellers in the market. As an illustration, Proton is one of the local automobile manufacturers while Honda and Nissan are foreign automobile manufacturers. Since there are only a few sellers in this market, the fewer firms dominate and control all or most of the market.
Additionally, Perodua and Toyota are sold homogeneous or differentiated automobiles such as Perodua Myvi 1.5 and Toyota Passo 1.0. The design of both cars is almost homogeneous; however, their specifications are a bit different. For instance, the valve mechanism…show more content… They have to always advertise their product to the consumers in order to increase their reputation among the community. Perodua and Toyota distributed a lot of advertisement through the mass media such as newspaper, television and website. Television and website are the major mass media that Perodua and Toyota used to advertise their automobiles in order to get attention among the public.
As an illustration, Perodua has begun the biggest corporate social responsibility (CSR) project which costs approximately RM20 million. It will build a new mosque, day care centre and kindergarten to serve the staffs who are working in its main facility in Rawang. By using the societal marketing concept, it may raise awareness among the companies to promote positive community activities and also overcome the social ills. Whereas, Toyota had created the first advertisement campaign through a telecast named “Sunday Night Football”. Toyota Camry will launch with two 30-second spots airing in this telecast for the purpose of presenting the vehicles to the audiences. Likewise, Toyota will launch a campaign called “TeenDrive365” to raise awareness between adolescents about the driving safety. The advertisement will be distributed mainly on the websites such as Twitter and…show more content… Each firm will shape its policies with an eye to the policies of the competing companies. Since there are only a few firms in the market, their competitors’ actions will definitely affect their profits. Therefore, the firms will be planned strategically and anticipated the moves of their competitors. In this technological era, Toyota and Perodua face many intense competitions among the automobile manufacturers. Hence, they have to continue of keeping up their good work to invent something of new to maintain their position in the market.
The firms in oligopoly market are generally having an incentive to collude. They will usually reduce output, increase price and block the new firm to enter the market to achieve monopoly power. The colluding firms will fix the price and divide the market in order to their increase economic profit. Nevertheless, the government will monitor the market to ensure that cartels and collusions are not controlled and manipulated the market. This is also to prevent the firm to acquire more benefits from the