Managerial Economics

Case study 5
Agarwal Packers And Movers Ltd.

1.
The household relocation sector has a dominant competing market structure. This
market exhibits following traits. It is a hybrid of dominancy and competition.
• The entry and exit into the market were significantly easy. The market was
very easily accessible by the companies. They could hop in whenever they
want and exit as per their choice.
• The difference in the prices – the market prices were very similar and had
very low difference in their pricing. In this dominant competitive market, the
price elasticity of demand is positive posing curbs on the power of pricing. If
APML would increase the price, the customers would distance away to the
existing substitutes.
• APML offerings in the busy household relocating field was the major USP
(unique selling point) to maintain little bit of dominancy and competition in the
market. It maintained a very good past history of product innovations and
service innovation which became their differentiators from their substitutes.
• The market where APML existed had many competitors. Some of their
competition also used their name fraudulently and operated. APML faced
heavy competition from large competitors as well as small organised
competitors.
• Customers took a lot of time in deciding and finalising their relocators.
Relocation according to a customer’s aspect is not an easy deal. They think
about many aspects before making the final choice. Aspects like safety, and
quality in service etc. hence, making a customer feel we are trustworthy of
them is what sells our service.
• The price fixed on a certain service forecasts a lot about the revenue generated
from that. The customer should fell that whatever service we are providing
them is worth every single penny charged to them. Since there are plenty of
competitors, make sure that we fix the relevant and worthy pricing to our
services be it not only in logistics industry but also in every other industry.
 2.
• AMPL had very huge prospective for development. If AMPL would increase
their capacity, it would earn more than history.
• The market where AMPL existed was a very dominant and challenging market.
• The identical pricing by the competition was a sign that AMPL should also be
in a proper and relevant range of pricing to withstand the market.
• The competitors meaning the product and services offered were also same or
identical.
• AMPL had a very pleasant strategy namely cost-plus pricing which was giving
them a stable income after removing the cost.

Mohammed Yaseen Qureshi

PES1202202920
MBA ‘C’ Section