This paper outlines the importance of proper identification of the type of market where the organization is intending to conduct business. The case of The Ritz Carlton Hotel Company, one of the prominent hotel groups, which is planning to expand into new Asian markets, is under consideration.
The increased readiness of overseas countries in recent times in attracting foreign direct investment is helping Ritz Carlton to think positively about market expansion. Since competition is different in different regions, the objective of Ritz Carlton is to identify less heavily competitive service markets across the world. Asia is the rapidly emerging region at present and Ritz Carlton is giving more attention to this region at present. Identification of proper market structure is necessary for Ritz Carlton to excel in emerging markets.
Based on the competition in the market, market structure can be divided into four major categories. In markets with perfect competition, the market determines the price whereas in monopoly, instead of market, the company decides the price. In market with oligopoly, only few suppliers are there and it is possible for the firms in such markets to control the price and market activities in such market structure. It is difficult to maintain supremacy in markets with monopolistic competition for a prolonged time. The ability to set different prices to different markets (price discrimination) is one of the major advantages of having a monopolistic market structure.
Monopolistic competition helps Ritz Carlton to prove the worth of its products and services to the customers. Moreover, it helps Ritz Carlton to enjoy huge profits for short terms and normal profits in the long run.