FORMS OF INDUSTRIAL ORGANIZATIONForms of Industrial OrganizationIntroductionAccording to McConnell and Brue “Economists group industries into four distinct market structures: pure competition, pure monopoly, monopolistic competition, and oligopoly. These four market models differ in several ways: the number of companies in the industry, whether these companies produce a standardized product or attempt to differentiate their products from those of other companies, and how easy or difficult it is for them to companies to enter the industry. » (McConnell & Brue, 2005, chap. 21). As part of the MBA/501 course, the learning team is responsible for identifying a company for each market structure and describing the pricing and non-pricing strategies used by the identified companies. As a team, we identified Coffee Business Culture, AT&T, Toyota Motor Corporation, and British Waterways. As part of this assignment, the team was also tasked with providing a brief explanation of industry developments using “market structure” simulation. Pure competition According to McConnell and Brue, “pure competition involves a very large number of firms producing a standardized product (that is, a product identical to that of other producers, such as corn or cucumbers). New companies can enter or exit the sector very easily…. In a purely competitive market, individual firms have no significant control over the price of products. Each firm produces such a small fraction of total output that increasing or decreasing its output will not materially influence total supply or, therefore, the price of the product. In short, the competitive firm is a price taker” (McConnell & Brue, 2005, chap. 22). Coffee is a cash crop whose price varies on the global market depending on supply and demand. According to the International Coffee Organization (ICO), in 1990, Vietnam produced 1.39 million bags (each bag weighs 60 kg) of coffee in 2006. Vietnam produced 15 million bags of coffee, a production multiplied by more than 10 in the space of 17 years. According to the ICO, Vietnam exported 1.16 million bags of coffee in 1990 and in 2006, 14.5 million bags of coffee. In 1994, the trade embargo was lifted by the United States on Vietnam, at the same time as Brazil, the world's largest coffee producer, was expanding its plantations, leading to increased pressures on offer. Due to its efficient coffee production, Vietnam has been able to sell its coffee at a lower price than other coffee suppliers in the international market. This lower price was sometimes lower than suppliers' cost of production in countries like Colombia, Nicaragua, Brazil and Ethiopia, leading to the closure of plantations..