Friday, 6 January 2012

The impacts of a monopoly on Stakeholders

The advantages on stakeholders is that he business has a very low % of failing as there are no others competitors in that market and so have no threat of of losing out on sales. This would result in employees having a secure job as cut backs will unlikely be needed as all sales go to the one business and would have a high paid wage due to profits being high, investors will get their money back quickly and make a profit from the business, suppliers will have the reassurance of getting their money for the supplies as the business will be gaining all sales, if shareholders have a lot of of shares in the business and if it's public  limited then the dividends will guaranteed to occur twice year as the company will be making profits all year round as it takes in all the sales, pressure groups can make sure that the one business is following fair trade and have low CO2 emissions as their is only one business in that market to focus and can see what they are doing.

The disadvantages on stakeholders are that suppliers will be unable to haggle a price with the business as their is no threat of supplier going to competitors as their are none and that the business can go somewhere else, customers will not have an impact on the prices as the one company in the market can charge what they wish as there is no other company for their customers to go to, the media can not cause the company any hassle through lowering sales through giving the business a bad image as their will be no other company for consumers to go to. 

1 comment:

  1. why dont u just say demand is inelastic every time you say consumers have no where else to go

    ReplyDelete