MARKET STRUCTURE; NIGERIAN FIRMS AND COMPETITION
BY EKUNDAYO AKINWALE, UNIVERSITY OF LAGOS.

There are two main branches in the study of economics, which are microeconomics and macroeconomics; market structure is a topic under microeconomics. So what is the market structure? Market structure is the organizational system and, characteristics which affect the nature of competition and pricing in that market. Different market structures result in different sets of choices facing a firm’s decision-maker, as an understanding of market structure is a powerful tool, in analysing issues, such as a firm pricing of its products and it’s potential to increase its profitability, which is the main aim of any business firm, whether service or a production firm.
There are two types of competition in the market structure, which are the perfect competition and the imperfect competition, under the imperfect competition which I will be focusing on, we have, monopoly, oligopoly, monopolistic competition, and oligopsony, and I will be illustrating how my knowledge of it in the past year, has made me understand how firms in a particular market, especially firms I grew up knowing, who have faced competition and how they fared, in the long run. Life itself is a competition, and we all have to compete, to survive, our ability to survive, will determine the extent of our existence, or perpetuity, the way humans and animals compete for resources is also the same way firms compete for a market share of profits.
Dstv a subsidiary of multichoice came into the Nigerian pay-TV, market in 1995 and has since then held on to the pay-TV monopoly in the country, there were about 1.5 million subscribers in 2016 according to PwC, and it is expected to reach 3.2 million at the end of 2019,and the main driving force behind DStv’s success and monopoly in Nigeria was as a result of its sole right to broadcast the English premier league, which many Nigerians most especially the males were addicted to, so any company trying to break its market power, must be able to provide the broadcast of the English premier league and at a cheaper rate, because Dstv subscribers were already groaning under the burden, of heavy prices lashed on them by multichoice, don’t forget Dstv was a monopoly, so they could dictate prices as they wished and the demand for their service was perfectly price inelastic (consumers had no other choice, they were the only PayTV service showing the EPL) . Then came Hitv, Hitv was accepted with open arms, it was announced as the winner of Nigeria’s LiveA for territory 70, giving it the exclusive rights to broadcast the English premiership across Africa, so many English premiership lovers had to abandon their Dstv decoders for Hitv decoders. Instead of Dstv to fizzle out as people forecasted, it added 300,000 new subscribers in that period.
How did they do it? Creativity and advertisements. Dstv reduced its prices for the period they lost the rights of broadcast, and created new content to appeal to a wider market, they portrayed that although soccer rights were lucrative, it did not have to be the basis for running a Pay TV business. Dstv knew and understood changes, as in, structural changes in demand, from football to entertainment, it introduced new programs that appealed to both women and children, and it also reduced its subscription fees, for times they weren’t showing the English premiership, Hitv lost its rights to show the English premiership due to its inability to get capital, its average revenue (AR) could not cover its average cost (AC) it wasn’t prepared and had nothing to fall back on, although no one can ignore the courage and undeniable hunger, for survival in the four years they were in operations 2007-2011, they fizzled out.
Dstv survived the competition, but Jik didn’t. Growing up as a child I fell in love with JIK. For the uninitiated, Jik is a liquid bleach used for removing stains and brightening white clothes. Jik a subsidiary of Reckitt Benckiser, didn’t see what was coming, Hypo was coming. Before Hypo, Jik was the number one bleaching product in Nigeria, until Hypo a subsidiary of Multipro enterprise Nigeria took over, Hypo invested heavily in TV ads and other commercial avenues. The aggressive advertisements at a time competitors were mostly quiet, helped the brand to endear itself to many Nigerians. Hypo understood the economy and introduced cheap products in form of sachets, to cater for the low-income earners, introduced its products into new markets especially the northern part, regions where Jik couldn’t penetrate because they were comfortable with their southwest and southern Nigerian market, according to a Nairametrics poll conducted on the social media platform, Twitter, Nigerians prefer Hypo when purchasing household bleach products. Hypo recorded the most votes in the poll, accounting for 58%, with 35% of voters preferring Jik to other household bleaching products. The demand for Harpic products earned 3%, while OMO bleach accounted for 4%. which showed the dominance of Hypo in the market, it was not the top bleaching product 10 years ago, but now it is, Reckitt and Benckiser were too comfortable and they lost their monopoly, loss of monopoly also means loss in market share of profits.
Conclusively, I want firms to know that a firm operating a monopoly market can fall into an oligopoly market when faced with heavy competition. Competition is inevitable but how a firm reacts to it, is what matters. Dstv encountered competition but put in place counter strategies and survived, while jik encountered competition, but didn’t put in place the right strategy to survive.