Pizza industry cannot be a part of perfect competition or oligopoly. Perfect competitions occurs when the companies sell similar products and the customers have all the data for the companies prices, making the market share ineffective on the pricing . An oligopoly occurs when only few companies can restrict others from applying their manipulation . Therefore, the pizza industry can be considered as monopolistically competitive as this industry consists of large number of companies and there are very less huddles for other small companies to enter the pizza market. Any company can choose their own style of pizza and make it famous with their quality of food.
The important structure for the monopolistically competitors is that they try to differentiate their products based on the appearance. Customers like to try different styles of products and pizza firms can do that very well. Firms like Pizza Hut and Domino’s who have already gained their name in the market are now focusing on the quality of their promotion rather than increasing the quantity. Domino’s unique style of delivery made them stand out in the market. Papa Johns is known for their unique ingredients. Chuck E. Cheese has focused on fun and entertainment at their stores. These differentiative styles have made them the most domination chain outlets and have grabbed customers attention.
The Importance of Differentiation Strategy in the Industry Product differentiation aids in the creation of value for the product. An intangible price is established among other companies when a corporation implements a differentiation strategy by focusing on the product’s total cost over other competitors in the industry.