1.0. IntroductionThe term monopoly originated from Greek which was used to imply single. Today, the term is used in reference to situations where businesses can only control certain products or services on the market that significantly determine the terms in which other individuals may have access on the products. Companies with monopoly type of business do gain greater market continuously than expected. Monopolies in some occasions are seen to lack competition on the economic market for their goods and services they are offering on the market and they are therefore seen to lack a substitution of goods or the products and service the offer on the normal market competition (Blinder, Alan, Colton, 2001).
Monopoly business types should be differentiated from other types like the monophony which is characterized by one buyer of a product or the services is seen in this case. Despite this, monopoly is also on the other hand characterized by its control on some particular sectors of the market. Monopoly also differs from cartel form of oligopoly where several providers act together to coordinate the services, the prices and even the sale of goods.
Monopolists are also are distinguished by the way hey produce goods and services. They produce limited goods and do put them on the market at a higher price than under the perfect competition or the normal price which results to the abnormal and sustained profits to the company involved. According to marketing strategies, monopolies can either form naturally or through the vertical and the horizontal merging. Monopoly is not illegal according o the law although certain behaviors can in cases where the business is dominant it can be considered abusive and this can result in the legal sanctions by the law enforcers within that particular environment.
Monopoly in his context is a single or a one supplier hat can produce and sell the products with no close substitutes for the goods and the services that are being produced thus fighting hard to maintain its market power on the market unlike in the oligopoly that their theoretical framework revolves around the firms strategies of interaction. The results in monopoly compare price fixing methods across all the market structures, they analyze the impacts of particular structures on the welfare and also plays differently in the variance in the technical demand assumptions in order to assess the consequences on the abstract of the societies model.
Monopoly has avariety of structures that is seen as its pivot in the operation, they include; perfect competition, monopolistic competition, the oligopoly and the monopoly where the sole business type supplier produces and sells goods of his own choice (Browning & Browning, 2003). 2.0. Background of the BusinessWhen we analyze the concept of monopoly in relation to particular companies operating in the market a good example of this business with good monopoly strategy in the market is the De Beers diamond trading business which has its specialization in selling of diamonds and jewellery is seen to be a best example of monopoly business since diamonds are rare making the business of diamond mining and selling of the products to be monopoly all over the world.
Over the last years this business has been successful with increasing number of consumers and demand for diamonds. De Beers and other various companies normally deals with diamond selling, diamond mining, diamond trading as well as industrial diamond manufacturing.
The diamond business is very much successful and it an international business carried in four countries thus Botswana, Namibia, South Africa and Canada. Diamond selling business owned by De Beers Company has been known for its monopolistic characteristics throughout the 20th century where by the diamond selling is seen to be dominant in market blocking any other competitors from entering the market (McTaggart, Findlay & Parkin, 1999).