Bullet Point 4

Question 1

What is an Oligopoly?

Answer 1

a market dominated by a few producers, with a high level of market concentration.

Question 2

what are the 4 main chocolate producers in the oligopoly, and what does this mean for the market? (3)

Answer 2

• Nestle, Kraft, Mars and Hershey.
  This means they:
  1. have considerable power over the pricing and quantity of the chocolate which they produce
  2. results in little variety for consumers
  3. prevents new entrants from making it to stores themselves

Question 3

What are 5 factors which success in competitive markets depends on?

Answer 3

1. pricing strategy
2. marketing
3. product development - USP, innovation, first mover advantage and differentiation
4. Brand image
5. Ethical stance

Question 4

why are the barriers to entry in the chocolate market so high? (4)

Answer 4

1. Oligopoly - market is dominated by large firms who have the knowledge and skill to operate at lower costs
2. huge capital needed for starting business in the market
3. advertising and marketing
4. EOS
5. strong brand awareness and loyalty of dominant firms