The main features of an oligopolistic market

 

What are the main features of an oligopolistic market? How do these firms set their prices? How we can distinguish oligopolistic firm from a monopolistic competitive firm?

Sample Solution

An oligopoly is a type of market arrangement with few firms domineering. When a market is shared between a few firms, it is said to be highly concentrated. Although only a few firms dominate, it is possible that many small firms may also operate in the market. Considering the market for air travel,  major airlines like British Airways (BA)  and Air France often operate their routes with only a few close competitors, but there are also many small airlines catering for the holidaymaker or offering specialist services. Similarly, while the ‘Big Six’ energy suppliers dominate the UK market, with a combined market share of 78% for electricity supply (according to the energy regulator, Ofcom),

becomes more complex and operations become larger. Carl von Clausewitz talks of the uncertainty of information that is experienced in the fog of war. Although this paper does not suggest that integrated communications can lift this fog totally, the evidence suggests that it will bring a degree of clarity and awareness to the battlefield. Using communications technology to provide even dispersed forces with the latest information guarantees that forces are better informed and therefore more likely to make the right decisions. Successful joint operations depend on a number of very different but capable forces working together. A centralised communication infrastructure along with a supportive joint communication/ operation doctrine can oversee such joint operations and act as a hub for communication with and direction of any of the units in the theatre, be it a modern fighter aircraft or a team of Special Forces.

4. Thus far, both the theoretical concepts surrounding integrated communications and the practical uses of the doctrine have been described. Ample evidence from recent military operations has clearly demonstrated that in the increasingly technological theatre of war a network centric approach to modern military operations in indispensable for achieving information dominance and an upper hand over any potential adversary. Integrated communications although is an integral component of modern conflict, it still has various deficiencies. It is important to address these issues so as to give a fuller insight into the Integrated Communication Network enabled operations. One of the major issues identified is a heavy reliance on technology, particularly infrastructure. There are various reasons why reliance on infrastructure brings with it significant risk. It can become the primary centre of gravity for opponents to exploit. This is particularly hazardous if alternative ways of working are not available. If this network becomes so critical to warfare that forces become incapable of fighting in a non-network centric fashion, there is little doubt that any disruption to networks that they are dependent on could be catastrophic and potentially crippling for a military. Nor is there any doubt that a capable enemy would attempt to exploit this weakness by disrupting networks.

5. An Integrated Communication Network provides a level of situational awareness that allows the military to be more flexible, which without doubt increases mission effectiveness. However, it is clear that it is not, by any means without flaws. A heavy reliance on technology is problematic, as it cannot be ruled out that technology may fail, may not be available at the time, and may be targeted by an enemy to reduce war-fighting capability. As the Integrated Communication Network becomes more predominant, steps must be taken to safeguard it from malicious action. It is also imperative that forces can operate in a fall back mode without the network, if required of them. Assuming that these vulnerabilities can be addressed, it has been shown that an Integrated Communication Network is an essential element of modern military operations. It is increasingly relevant to conduct warfare in such a manner that, as a force multiplier, considerably increases a military’s ability to be successful in a wide range of operations.

6. It has been amply displayed that an integrated communication network for the armed forces is going to be the back bone of any Network Centric Operations. However the use of such a capability has not been tested in any major war against an equally capable opponent. Possessing such a capability will also mean that the opponent will make all possible attempts to degrade it. Over reliability on such a system will prove to be fatal if the forces are not trained and prepared

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