Discuss and analyse the monopoly structure used in Australian banking sector
Introduction: The Australian monopoly market structure follows oligopoly system. Most of the service sectors in present Australia goes hand in hand with this oligopoly market structure from retail to banking industry to name a few. However, the retail sector follows duopoly system which is a smaller version of oligopoly market structure. In oligopoly market few firms function only under one individual or a group. Whereas in monopoly one individual runs a business or a market all by himself. Monopolistic system faces strong competition in any industry and have a strong barrier for any other firm to get in the market. The big retail companies like coles and wools worth have taken the lion’s share in the in market and not letting any other companies to survive in this war. Studies reveal that the Australian banking industry on oligopolistic war resulting in prohibition of any new entry.
Various Kinds Of Monopoly Market Structure In Australia: Australian bank comprises of four massive banks namely Commonwealth bank of Australia, ANZ Bank, NAB Bank and Westpac which follows oligopolistic approach, they are constant at trying to maximizing profit. Most of the times it has been observed oligopolist firms brings about outstanding profit. With time the competition in banking industry is increasing. The banks work together and distribute the profit among them. However, in the year 2003-04 the four banks has generated 400 million dollars by assets and mutual funds etc.
Australian retail industry such as Coles or Woolworths have dominated the industry and does not let other companies to come into the market . Not too long ago some international organisation like Aldi tired to get to the market but could not sustain Evidence claim that this monopoly market structure in the banking industry ultimately supports the growth factor of the industry and the country as well.
To setup a banking industry requires a large amount of capital to invest which makes it hard to get in. People invest in one of the four major banks in Australia which holds the lion’s share in the market where investors invest. Apart from it, in retail sector people are mostly drawn to big companies such as Yeats and wall. Most of the people in Australia earns their livelihood by running a retail store but the existence of such massive retail shops where most of goods can be found at one place people choose big markets over small retail stores. The banking as well as retail sectors are focusing on duopolistic and oligopolist approach. Hence bringing a negative effective on Australian economy.
Government has taken over the Australian post and is playing the role of a monopolist. The Australian Post service is very fast and powerful that is does not let any other newcomer to place its foot on the market. Australian post is the perfect example of monopoly. The monopolist has the control over the price and has the power to bring any change in the industry. However, the longevity of any monopoly business can be determined. To bring up a perfect instance, Amul kept its name on the top for selling butter worldwide but failed to maintain throughout as other organisation started selling butter too. Here we can see a change from oligopoly to monopoly market structure. Examples of monopoly can be cited at different places as well as different areas.
The government of Australia has given the authorisation of distributing letter post to the postal industry of Australia by regulating the act of 1989. Here the government has all the necessary authorisation to pass an act, as well as it had managed to pull things efficiently by making the postal industry more convenient. Government is acting as a monopolist by doing so it manages the cost of the service provided. The increased price of posting a letter has gone up to 43% making it difficult for a number of people to use it.
The economic rivalry has resulted to give birth to both good and the bad sides. However, in the banking industry, the four largest banks of Australia has taken the country into its grip as a result no other bank have their existence, this stands as positive aspect as because no fraudulence cases have been filed as these banks are trustworthy. Options are limited to Australian people in this sector while they enjoy the safety from any loss of money. But in the retail industry faces a lot hurdles in order to survive in the oligopoly competition.
Australian post service is impeccable and provides a good service to the people of Australia but being a monopoly market structured body it does not have the control on its price, the higher authority manages it and sometimes they increase the price to an extend that crosses the limit for people to use the service and faces a lot of difficulty. For not having sufficient option citizens of Australia are bound to use the service. Monopoly Market Structure assignments are being prepared by our marketing experts from top universities which let us to provide you a reliable best assignment help service.