An oligopoly is a market structure characterized by a small number of large firms that dominate the industry. These firms have significant market power, meaning they can influence prices and control output levels. Oligopolistic markets often exhibit interdependence among firms, where each firm's actions have a noticeable impact on its competitors.
Non-price competition refers to competition between firms that focuses on aspects other than price, such as product differentiation, advertising, branding, and customer service. In non-price competition, firms seek to attract customers based on factors other than offering the lowest price. Instead, they emphasize the unique features or qualities of their products or services to differentiate themselves from competitors and gain a competitive advantage.
In Malaysia, several oligopolistic firms engage in non-price competition to differentiate themselves and gain a competitive edge. Here are a few examples:
Telecommunications Industry:Â Companies like Maxis, Celcom, and Digi dominate the telecommunications market in Malaysia. These firms often engage in non-price competition by offering value-added services such as exclusive content partnerships, faster network speeds, better customer service, and innovative data plans rather than simply competing on price alone.
Automobile Industry:Â Proton and Perodua are the two main players in the Malaysian automobile market. These firms utilize non-price competition strategies by focusing on product differentiation, advertising campaigns emphasizing safety features, technological advancements, and after-sales services to attract customers.
Banking Sector:Â In Malaysia, banks such as Maybank, CIMB, and Public Bank operate in an oligopolistic market. These banks compete through non-price factors such as the breadth of their product offerings, convenience of branch locations and ATM networks, personalized customer service, and innovative digital banking solutions rather than solely competing on interest rates or fees.
Airline Industry:Â Malaysia Airlines and AirAsia dominate the airline market in Malaysia. These airlines engage in non-price competition by offering various amenities such as in-flight entertainment, comfortable seating options, loyalty programs, and strategic partnerships with hotels and other travel-related services to attract passengers.
These examples illustrate how oligopolistic firms in Malaysia utilize non-price competition strategies to differentiate their offerings and maintain their market share in various industries.
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