Hypothetical coffee shop business
Sufficient Grounds is a coffee shop business located at the center of New York City; being at the center of the busiest city, the sales are enormously high. However, to understand how the business operates it is vital first to define the market structure of Sufficient Grounds based on the geographical area and the product under sale.
A market structure is the unified physiognomies of a market, for example, the total and comparative power of sellers and buyers and the degree of complicity amid them, forms and levels of rivalry, magnitude of product distinction, and simplicity of exit from and entry into the marketplace (Forgang & Einolf, 2007).
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Sufficient Grounds is a coffee shop business located at the center of New York City. The coffee shop business being at the center of a busy city has many customers and rivals. Herfindahl-Hirschman index is the summation of the doubled market portions of the uppermost N major firms in the business.
Due to the current market structure, the two vital managerial decisions to consider making include being decisive on the publicizing media and the concentration of the promotion in order to win more customer loyalty. The second managerial decision is on the pricing and quantity of the coffee.
Besanko, D., Braeutigam, R. R., & Gibbs, M. (2011). Microeconomics. Hoboken, NJ: John Wiley.