How a company can increase its profitability and deliver more value to its stakeholders?

Before going into the details of this topic it is better to discuss some features of these trends. If we talk about perfect competition, it includes large number of buyers and sellers; the price is determined with the equilibrium of demand and supply in the market; the firm is price taker and not price maker; the transportation is almost zero which does not affect the market price. And if we come to the point of how a company can increase its profit and attract stakeholders in case of perfect competition then the company may produce different and unique types of products in the market to obtain larger profits and confidence of stakeholders. Perfect competitor can increase its profits by setting the marginal revenues to marginal costs.

Monopolistic competition is blend of perfect competition and monopoly. In case of monopolistic competition, products with more elastic demand is being produced, so if a company wants to maximize its margin of profits then the company may increase the supply of necessities and also with the help of proper publicity and advertisement the market share is also captured to some extent. Because there is stiff competition in the market so the company may enhances profit margin by producing high quality products in the market. They may also increase their profits by increasing output and price also.

Oligopoly is a market structure in which there are few dominant sellers producing homogeneous and differentiated products in the market. The firms have relatively control over price. Through this model a company can increase its share and profit margin by collusion. They may collude to set price and output level in order to maximize industry profits. But there is a criticism upon it that some may said that this arrangement is illegal. In case of oligopoly mergers of the firms have been possible.