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AT & T And Verizon Communication

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Long gone are the days of sitting at home waiting for a phone call or finding a computer to look something up on the internet. In America, mobile phone ownership is at all time high with 95% of Americans owning some sort of cell phone whether it be a smart phone or a general dial and speak phone (Pew Research Center, 2018). This case study will examine firms in the mobile phone market, the market structure and correlating pricing strategies to give a better understanding of how organizations such as this can achieve profit maximization. So, who are the key Players? In 2017, both AT&T and Verizon Communications were listed as the largest market share holders in their field, with AT&T earning $163 billion in annual sales, ahead of Verizon …show more content…

What leads to this determination? As discussed earlier and clearly defined in the description of oligopoly this market is dominated by only a few firms whose actions have an affect on others in the industry (Samuelson & Marks, 2015). Each of these firms must be able to react and consider the reactions of its competitors (Agarwal, 2017). This is highly prevalent with this market and can by seen by the amount of advertising that is conducted and promotional offers that are always occurring. Another thing that that defines cellular communication firms pertaining to the structure of oligopoly is the barriers of entry that must be faced. Firms in this market face limited availability of entry because of the small cellular spectrum available being already at max capacity. This occurs because every carrier is subject to purchasing airwaves and when the FCC auctioning them off only to those with billions of dollars and who could afford to purchase the space (Higginbotham, 2017). Finally, when it comes to information availability, the cellular market is spot on with the characteristics of oligopoly which implies consumers have an imperfect knowledge about price or availability (Agarwal, 2017). This comes down to the crazy amount of advertising, promotional offers, different data rates, and finally, plan costs. There are so many options, consumers really …show more content…

When it comes to pricing strategies, once again it is consistent because of the way these firms must react to every action made by another firm and the fact they must use alternative methods to set themselves apart all while trying to avoid a price war. Finally, the imperfect knowledge that exist when it comes to customers knowing the best price or availability clearly shows how complicated this market is and its direct correlation to

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The pricing strategy or pricing policy is one of the most important managers make for a product as it affects the profitable outcome and competitiveness that a product may make. (Toni, 2017). A business can use a variety of pricing strategies when selling a product or service. The price can be set to maximize profitability for each unit sold or from the market overall. It can also be used to defend an existing market from new entrants, to increase market share within a market or to enter a new market by dropping the price or offering more benefits with the device such as packages.

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