The world’s first all-optical notebook computer was launched in 2003 by Quasar. The Neutron is the result of revolutionary efforts by the company. The product processor and memory uses high-speed optical conductors that are five times the speed of existing microchip based companies. The Tata simulator exercise is an aid to decide which industry structure Quasar should use to increase profits, create competitive advantage and explores implications of each on business ventures.
Market Scenario According to Grant (1991), a corporation’s capacity to gross profits in excess of the sum of debt and equity is dependent upon two aspects: having competitive advantage over competitors and the rate of growth in a particular …show more content…
In an oligopoly, the degree of o pricing power depends on the differences in products. These two products were virtually the same. Because there are only a few competitors, both companies would benefit by coordinating strategic actions so that they both prosper (Newman, 2013). One way to coordinate is to agree to offer certain features on the notebooks exclusively rather than battle through price wars.
Monopolistic Competition Quasar has found a new market for notebooks, namely targeting customers to buy the notebooks for personal use rather than sell exclusively to corporate accounts. Optical technology has become readily available and there are new competitors in the market. To have a leg up in the industry, we must add new features to differentiate our product from competitors. Robert, a marketing consultant suggests that Quasar launches a variant of the notebook similar to Kindle called the Ceres. The firm could set aside 200 million for branding development. This idea would work because it could sell at a premium price. Ceres production would also use 12 million units of unused optimum production capacity, which would lower production costs for the Ceres and the Neutron. This move allows Quasar to target new market segments. Another avenue is to sell cheaper complementary products as Apple has done with iTunes (Anand, 2006).
Perfect Competition In a perfectly competitive industry,