The characteristics of oligopoly is interdependence, oligopoly firms have big relative to the market and they interdependence in making decision. The number of competitor is less and any oligopoly firms changes in the price and other economic factors or marketing strategy ,it will affect the change in competitor firm. So the firms must attention about the other competitor change in the industry and also need to think over the market demand and cost of its product. In oligopoly market no one can ignore the reaction of another firms so they must be interdependences.
For Instance, Hybrid electric vehicle started is more expensive than fossil fuel bases vehicles, because of the extra batteries and more electronics but it have lower fuel cost. When the first hybrid car have been created, other firms also created a hybrid car. The Volkswagen Group show its first hybrid in 2011. Volkswagen is one of the few major car makers that doesn't already have a hybrid on the road. It will be a new market. Volkswagen Group also come out with all-electric Audi sports car, the E-Tron, in 2012. Example, that is a comparison between Honda Jazz vs Volkswagen Up, the price is almost the same ,value start from $14,990, two also hybrid car ,if one of the car raise up the price the another car will also raise up the price, that is because it is the same type car and if one of the car raise up the price and the another car price stay constant , it will lose in the market .
Identical or differentiated products The characteristics of oligopoly is identical or differentiated products certain oligopoly industry produce identical products, while other produce differentiated products. Identical product in oligopoly market is the industry manufacture the intermediate goods which used by other industries to produce their products. Examples steel and petroleum. Differentiated product in oligopoly market is the industry produce the goods for consumes.
Example is automobiles and computers. Beginning in the late 1930s, Volkswagen is manufacture tanks and driving equipment for Nazi Germany , and it is produce identical product in began. After that, it start to manufacture vehicles and it fit the demand of consumers. And now Volkswagen Group is leader of automobile manufactures, Volkswagen is bold enough to announce that it will be the No. 1 seller of vehicles in the world by 2018.This is the target of Volkswagen group .Volkswagen is a strong competitor , last year, Volkswagen group ranked No.3 in the world.