How businesses are affected by competition Essays - Market Structure

How businesses are affected by competition Essays - Market Structure How businesses are affected by competition Some markets are highly competitive, while others are a lot less so. A good example of a competitive market in which there are many buyers and sellers is that of Internet booksellers. Because there are so many firms selling identical products then the price of these books will be highly similar. This competition helps to drive down the profit that such firms can make. Competition occurs when two or more organisations act independently to supply their products to the same group of consumers. Direct and indirect competition Direct competition exists where organisations produce similar products that appeal to the same group of consumers. For example when two supermarkets offer the same range of chocolate bars for sale. Indirect competition exists when different firms make or sell items which although not in head to head competition still compete for the same in the customers pocket. For example, a High Street shop selling CD's may be competing with a cinema that is also trying to entice young shoppers to spend money on leisure activities. What would happen if there was no competition? If there was no competition in the markets, companies woud neglect technological development and cost reduction efforts. Price and service would become more advantageous to companies, and consumers would result in no receipt of benefits. Now, let us take a look at what would happen if there was no competition in the markets. If different stores did not compete with each other and talked to each other to raise the price, we would only be able to buy the same product at the same price, wherever we went shopping. If manufacturers decided on the stores' selling prices, the stores would not be able to compete on price. We would have to buy the same product at a high price, wherever we went shopping. If successful bidders for public works were chosen by underhand discussions between the bidders, the cost of the public works would be higher than the original cost adequate to the works. This would result in a waste of our taxes. If one manufacturer monopolize one market by ousting its rivals, there would be no competition in the market. As a result, we would not be able to choose products of better quality and lower prices. If several companies jointly forced certain companies offering products and services at lower prices out of the market, we would lose the opportunity to choose a product for a lower price or better service. If two companies with large market shares merged to form a new company and monopolized the market, there would be no competition. Then, if the price rose, we would have no choice but to buy the product from the new company. 12 Reasons Why Competition Is Good For Business By Susan Oakes 7 Comments 12 Reasons Why Competition Is Good For Business By Susan Oakes 7 Comments 0 27 1 1 Have you ever thought that marketing your small business would be easier without competitors? Most of us have at time to time. Whilst you shouldn't be fixated on your competitors, you can't afford to ignore them. Having competitors is healthy and this video shows one reason why - collaboration: Remember the competition you face in your market may be direct or indirect. Here are another 11 reasons why it is good for your business: Helps grow your business and market Reminds you to focus on keeping your key customers Provides opportunities for creative thinking Stops complacency Allows for working together on common industry or market issues Can motivate you to a higher standard of customer service or innovation Provides ideas you can adapt for your products or services Helps identify potential threats to your business Helps your strengths and weaknesses Provides an alternative for customers who are not a good fit for your business Helps you work smarter The Advantages and Disadvantages of a Competitive Workplace by Jared Lewis Competition in the workplace can be a good thing for a number of different reasons. By the same token though, competition can also have some disadvantages. Some industries are more conducive to competition in the workplace than others. For instance, those in the sales field will typically be more competitive with coworkers than individuals in other fields, such as information technology. Nonetheless, a little competition in even the least competitive industries can be positive. Grammarly Makes Sure Everything You Type Is Effective And Mistake-Free. Try Now! Production One