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Essay / Research Paper Abstract
This 6 page paper looks at an industry where the structure has changed. The railway industry in many countries was a monopoly, but has moved to an oligopoly structure. The paper answers a set of questions on how this has occurred, the impact it has on strategy, transaction costs, competitive forces and the type of industry data and measures that may be used by management in the competing firms. The bibliography cites 7 sources.
Page Count:
6 pages (~225 words per page)
File: TS65_TErailolig.doc
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Unformatted sample text from the term paper:
countries is the railway industry (Lane, 2002). Inmost countries the railway industry started out as a monopoly, with only one company supplying the market. The railway industry may be seen
as a natural monopoly, this is an industry where there is a very high ratio of overheads to marginal costs. This is often seen in industries where suppliers have to
build national networks or infrastructure and the margin cost of supplying individual customers is very low. This is also seen in other industries, such as telecommunications and water supply. The
railway industry has undergone change in many countries as legislation has been introduced in order to increase competition. The industry may be seen as moving from a monopoly to an
oligopoly in many countries; where there is a choice of suppliers, but there are still relativity few suppliers (Lane, 2002). An oligopoly is seen where there are only a
few operators in the market, or where the market is effectively controlled by only a few operators. The limited nature of the resources; the railway track network, limits the
number of trains and the number of suppliers that can compete. Governments have seen the need to ensure there is competition in order to overcome potential problems associated with monopolies.
Many railway industries had been nationalized, this facilitated liberalization along with privatization as firms were able to bid for the licences to operate in specific areas or on specific routes,
providing competition. Two different types of oligopoly exist; where there is a high level of competition, or where there is cooperation and collusion (Nellis and Parker, 2006). The former leads
to the benefits of competition whereas the latter can be harmful. Question 2 - Short and long run behaviour in the industry In the short run many different
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