Shake Shack: Monopolistic Competition

In a monopolistic competition, there are many competing producers, with each producing differentiated products. Monopolistic competition is a type of market structure where many producers sell products that are different from one another, such as in quality or by branding, that’s why there are no perfect substitutes. Product differentiation is considered a marketing process where companies try to make their products stand out and unique compared to their competitors, making them target a specific market and more attractive. You can find product differentiation in these three forms, style, quality, or location. Furthermore, there is free entry and exit in the long run in a monopolistic competition. Schwartz, Elaine. “Why Shake Shack is About

Shake Shack’s meat purveyor, LaFrieda, provides several varieties of burger blends for their customers. However, it took twenty different samples to get there. Shake Shack started out as a hot dog cart back in 2001 in Madison Square Park, then progressing to a kiosk in 2004, and well the rest is history. Shake Shack is a $2 billion company and sells around $21 a share of stock. The company is all about changing consumers tastes, considering fast food restaurants aren’t necessarily about being “fast” anymore, its more about the actual food now. In 2013, Shake Shack was placed in the $72 billion burger market. U.S.’s burger market is bigger in size than other main food markets in the United States, such as the pizza market. Burger market’s in the United States have a lot of the same characteristics that you would see in a monopolistic competition. Market entry is incredibly easy mostly due to the fact that to make a hamburger all you need is a meat and a grill. But, to have product differentiation you need to get a unique burger formula that helps you to stand apart from the other burger