Friday, September 6, 2019

Swingline Stapler Essay Example for Free

Swingline Stapler Essay The Swingline Heavy Duty Stapler is an office supply, more so than a household item. A casual attempt to purchase a heavy duty stapler online (e.g., Amazon or eBay) makes it clear that there are numerous sellers of this product other than Swingline. Names like Stanley Bostitch, Sparco, Paper Pro, Hunt, Arrow, and Rapid, to name a few; and this list doesn’t include the models offered by the brick-and-mortar retailers like Office Max, Office Depot, and Staples. A more extensive search would only add to the list. Searching by brand within any of these online sites, however, pretty consistently reveals Swingline as the brand with the most choices; and more often than not, Stanley Bostitch falls into second on the list by product count. This anecdotal evidence hints that collectively, Swingline and Stanley Bostitch may very well have a strong share of a crowded market; oligopoly or monopolistic competition – it could go either way. Page 2 In terms of establishing the price for its heavy duty stapler, it is important to Swingline to price it reasonably close to its many substitutes. The competitors for this product provide a â€Å"range† of prices that serve as a boundary for Swingline to use in determining the price for its product – a feature of monopolistic competition. Based on the brand listing information, I would expect that a major competitor, Bostitch, is the one that Swingline pays most attention to – Swingline’s pricing decisions are somewhat dependent on the expected response of Bostitch. This is a characteristic of an oligopoly. In one sense, it can be argued that a heavy duty stapler is a standardized product – it serves one function. Due to this, there is not a significant amount of advertising done to try to differentiate the Swingline Heavy Duty Stapler from its competitors. Sellers in monopolistic competition and oligopoly both advertise to point out product differences, but standardized products exist primarily in oligopoly and perfect competition; so, in this regard, oligopoly seems to be the correct fit. On the other hand, attempts are made to give us the perception that the heavy duty staplers are indeed different. Paper Pro, for example, tells us this about one of their models: â€Å"Patented unique staple-driving technology provides the power to drive a staple through up to 65 sheets of paper with the press of just two fingers.† Yet a different Paper Pro brand tells us: â€Å"80% Easier than other heavy duty staplers†. Not to be outdone, Swingline counters with a pitch for its complementary product: â€Å"70 sheet staple capacity with Swingline Optima High Capacity staples†. Add different sizes, shapes, and colors, and a case can be made for product differentiation. This would seem to bring monopolistic competition back into the mix. Finally, on the surface, it seems that barriers to entry would be minimal. The production of a stapler does not require a high level of technology or a significant amount of financial capital. For a new seller to successfully penetrate the existing market, however, it seems they would need to have a price advantage due to the relatively standardized nature of the product. The ability of Swingline and Stanley Bostitch to match any new competitor’s â€Å"sale† price could effectively limit entry into this market. Based on this criterion, a case can be made for both monopolistic competition and oligopoly. In conclusion, it seems that characteristics of both monopolistic competition and oligopoly are present. This would put the market for heavy duty staplers somewhere in the middle of the competitive continuum: perhaps some oligopoly-type behavior by Swingline and Stanley Bostitch, but more like monopolistic competition overall. Given what I perceive to be as an inability to earn a positive economic profit over time, I’ll hang my hat on monopolistic competition.

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