Need Help!!!: coursework question Watch

Mr T 999
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I'm doing an coursework and one of the questions i'm finding quite hard the coursework is about how discount stores such as aldi has affected the big 4 and consumers and the question is ' how has this structural change affected both the supermarkets and the consumers'
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Username4647
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(Original post by mr T 999)
I'm doing an coursework and one of the questions i'm finding quite hard the coursework is about how discount stores such as aldi has affected the big 4 and consumers and the question is ' how has this structural change affected both the supermarkets and the consumers'
I think, and I may be wrong here:

the structural change refers to the change in the market structure? thus its gone from an oligopolistic market structure with possible collusion (there are different types, i forget) to one that is more price competitive. Not british or in the UK but I just read that aldi has gained a 1/3rd of the market share. Think thats effectively a price war.

For the big 4 supermarkets:
-their profits have decreased. They may resort to reducing costs or production or either increasing sales or both, employees salaries might be decreased.

-they are under more pressure to resort to price and non price competition. Price competition refers to the things a firm does to lower its price, or just lowering its price.
Non price competition refers to things that do not result in a price change of the product, but are meant to make it more popular or increase its sales. Advertisement, increasing the quality w/o raising price, research, special loyalty schemes and bonuses along with the product for customers.

- if they were colluding in terms of explicit(a formal agreement) or tacit (price leadership, we all set the same prices now), well its been shattered now.

-Obviously, their market share has decreased :P


For the consumers:
-their consumer surplus has increased (due to lower price)
-they now enjoy greater choice and variety of products (possibly)
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