This document summarizes key concepts around market power, monopoly markets, competitive markets, and mergers and acquisitions. It defines market power as the ability to control prices and subdue competitors. A monopoly is described as a single firm controlling an entire market. Competitive markets have many small buyers and sellers of identical products. The document then lists arguments for and against monopoly and competitive markets. It provides an overview of Bangladesh's economy and major industries like agriculture, manufacturing, and the textile sector. Finally, it discusses mergers as the combining of firms and acquisitions as one firm buying another, along with reasons for and risks of mergers and acquisitions.

1. Chapter-5
Managing Market Power

2. Group Name- Success Hunter
Group No- 5
Name ID
MD. ABUL KASHEM 106
MD. AHIDUZZAMAN 107
MD. ZIAUL HUQ 130
NIMAI KUNDU 131
MD. ASHKUR RAHMAN 137
MD. NOMAN HOSSAIN 141
MD. SAHED ALI 155
G.M. SORWAR HOSSAIN 162

3. Meaning of market power
 Market power is the power held by a firm
over price and the power to subdue
competitors.
 Market power is the ability to control the terms
and condition of exchange.
 Market power is the ability to raise prices
without losing all one’s customer to
competitors.

4. Importance of Market power
 Infinite Buyers/ Infinite Sellers.
 Zero Entry/ Exit Barriers.
 Perfect Information.
 Zero Transaction Code.
 Profit Maximization.
 Homogeneous Products.
 Efficiency of Perfect market.
 Existence of a general equilibrium.

5. What is monopoly market
Monopoly is the situation in which a single
company owners all or nearly all of the
markets.
 In such an industry structure, the producer
will often produce a volume that is less than
the amount which would maximize social
welfare.

6. Characteristics of Monopoly
 Price control.
 Increased scope for mergers.
 Legal sanctions.
 Predatory pricing.
 Price elasticity.
 Lack of innovation.
 Lack of competitor.
 Monopoly litigation.

7. Competitive Market and its types
A market in which there are enough small buyers
and sellers of an identical product that no
single buyers or seller is sufficiently large to
affect the market price.
Types:
(1)Monopolistic Competition.
(2) Oligopoly.

8. Characteristics of Competitive Market
 Many buyers and sellers.
 Standard product.
 Easy entry and exit.

9. Arguments for monopoly
 Advantage of Economic of scale.
 Advantage regarding Research and
Development.
 Advantage regarding Extension of
Consumption.
 Trade Cycle.
 Low or no Advertising Cost.

10. Arguments for monopoly
 Regarding extension of consumption
 Trade Cycle
 Advantage of Economics of scale.
 Advantage regarding research and
development.
 Advantage Low or advertising cost

11. Arguments against Monopoly
 Disadvantage regarding redistribution of income
 Allocate inefficiency
 Lack of efficiency.
 Setting up more prices.
 Produced goods may be of low quality
 Political unfairness
 Hamper the advantage of technology
 Reduced employment opportunities
 The price of material is always poor
 abnormal profit

12. Arguments for Competitive Market
 Market power.
 Product Differentiation
 Number of Competitors.
 Barriers to entry.
 Elasticity of Demand.
 Excess Profits.
 Profit Maximization
 Price quantity and profit issues.

13. Arguments against Competitive Market
 Profit is Main Motto.
 Unhealthy Competition.
 Excessive product differentiation.
 Free excess in the market.
 High cost of advertisement
 Cheating.

14. Threats for Monopoly
 Breaking up monopolies.
 Business ethics in the face of monopolistic
market
 Law

15. Threats for Competitive Market
 Easy Access.
 Government intervention.
 Homogenous products.
 Global market place
 Syndicate.
 Customer Choice.
 Political preference

16. Present Market Power of Bangladesh
The economy of Bangladesh is constituted by that of
a developing country. Its per capita income in
2008was est. us$1500(adjusted by purchasing power
parity) significantly lower than India, Pakistan , both
which are also lower than the world average of
$10.497According to the gradation by the
International Monetary Fund, Bangladesh ranked as
the 48th largest economy in the world in 2008, with a
gross domestic product of US$224.889 billion. The
has grown at the of 6-7 percent over the past few
years.

17. Agriculture
• Rice and Jute are the primary crops
• Tea , vegetables are assuming greater importance.
Manufacturing & Industry
• 1.5 million were employed in garments sector.
• Bangladesh has overtaken India in apparel exports in 2009.
• In 2001-2002.garments export was 52 percent of total export.
Textile sector
• It includes knitwear and ready-made garments along with specialized
textile product.
• It is the nations number one export earner.
• Bangladesh is 3rd in world textile export.

18. Foreign Remittance
Fiscal Year Total Export Total Import Foreign
Remittance
Earnings
2007-2008 $14.11b $25.205b $8.9b
2008-2009 $15.56b $22.00b $9.68b
2009-2010 $17.6b N/A $10.87b

19. Macro- economic Trend
Year Gross Domestic U.S Dollar Inflation Per Capita
Product Exchange Index(2000 Income as %
=100) of USA
1980 250.300 16.10TK 20 1.79
1985 597.318 31.00TK 36 1.19
1990 1.054.234 35.79TK 58 1.16
1995 1.594.210 40.27TK 78 1.12
2000 2.453.160 52.14TK 100 0.97
2005 3.913.334 63.92TK 126 0.95
2008 5.003.438 68.65TK 147

20. Merger
Merger refers to the combining of two or more
entities into one, through acquisition or a
pooling of interest.

21. Causes of Merger
• To perform better
• To reduce competition
• To get momentum
• To change their position in the market
• To use competitive advantages
• Greater value generation
• Economics of scale
• Market Share
• Cost efficiency
• Tax gains

22. Importance of Merger
 Administrative benefits
• Financial leveraging
• To improve profitability
• To increase EPS
• To increase higher competitiveness
• Introduce new product in the market
• To get distinctive advantages
• To get monopolistic advantages
• Positioning
• Skilled human resource

23. Dangers of Mergers
• Age of firms
• Size of firms
• Technology
• Management style
• Type of employees
• Legal expenses
• Cost of takeover
• Bad impression
• Decline price in equity price & investment value
• Suppressing of competing business

24. Acquisition
An acquisition is also known as a takeover or a
buyout, is the buying of one country by another.

25. Causes of Acquisition
• To expand activities
• To acquire new business
• Good image
• Demand in the market
• Reduction of cost
• Increase depth of product line
• Limiting opportunities for key customer
• Public relation
• Keeping present management team busy

26. Importance of Acquisition
• Strong market position
• Complementary skill set
• Improved profit
• Geographic expansion
• Access to new customer
• Cost reduction

27. Danger of Acquisition
• Concealed problem
• Costs of acquisition
• Inadequate valuation of firm
• Integration difficulties
• Style of management
• Large or extraordinary debt
• Inability to achieve synergy
• Unqualified human resource
• Volume of activities

28. Thank you
All