Advantages And Disadvantages Of Competitive Competition

Competition is prevalent in various aspects of life, including sports, school, and jobs. Everyone at some point in their lifetime will have to compete against others in order to achieve a goal or earn a prize. It’s how the world has worked for a long time; it’s survival of the fittest and this minor competition between everyone is how we have continuously gotten smarter, faster, and stronger. Competition is necessary to a certain degree, but how much is too much? It’s definitely not a bad thing, and as long as there’s a healthy amount, it can be beneficial because it fosters self-improvement, and it will push people to go all out and try their absolute best.

Another type of competitive market is oligopoly. Oligopolistic markets are pretty much controlled by a small amount of firms. A good example of this

The Intensity of Rivalry among Competitors in an Industry (High): Equally balanced competitors exist within the industry such as BCF and KMD; these firms also face competition from retailers and wholesalers. The growth of the industry is relatively agile in both financial and technological aspects. The intensity or rivalry is further accentuated by relatively high storage and fixed rental costs, extensive product differentiation and minimal switching costs.

There are four types of market structures: Monopolistic Competition, Monopoly, Oligopoly, and Perfect Competition. Monopolistic Competition is also known as competitive market. In this market structure, there are a large number of firms that produce similar but somewhat differentiated products for the same target customers. The market share is also divided among large number of firms making it difficult for one firm to become the market leader. On the other hand, Monopoly is a type of market structure in which only one firm controls the whole industry. There are strict barriers to entry for new firms due to governmental restrictions or the monopolistic power of the firm itself. In Oligopoly, the whole industry is dominated by a few large scale firms that set prices, introduce innovative products, and use heavy campaigns to attract buyers. All other small scale firms follow the changing market patterns set by these oligopolistic firms. Lastly, perfect competition is a market structure in which there are a larger number of firms that produce similar as well as differentiated products for

Monopolistic competition occurs when potential competitors of the company are trying to develop a differential marketing strategy in order to capture market share.

A market is defined as an institution that brings together buyers (demanders) and sellers (suppliers) of a particular good or service. A Market structure is the relationship among the buyers and sellers of a market and how prices are determined through outside influences. There are four different types of market structures. Two on opposite extremes, and two comfortably in the middle. On one end is perfect competition, which acts as a starting point in price and output determination. Pure competition is when a large number of firms sell a standardized product, entry and exit is very easy, and an individual firm cannot control the price. On the other extreme end is Pure monopoly. A monopoly is characterized by an absence of competition, which will often allow one seller to control the market. A Pure monopoly is essentially the same thing, but also includes near impossible entry and no substitute goods. Two more common market structures are monopolistic competition and oligopoly. Monopolistic competition has a large number of sellers producing different products, while an oligopoly has only a few number of sellers producing similar products. All in all pure competition, pure monopoly, monopolistic competition, and oligopoly are all unique market structures with differing characteristics, but have one main goal, profit maximization.

Competition is important because without it there would be no market place. The ability to compete against another firm and or company has a major impact on the economy, if there is only one company in the market place that is offering a product or service then that company can charge whatever price it deems to be reasonable to the customers. The product and or service may not meet the customer’s expectation

•Monopolistic competition- When an industry contains many rival firms, each of which has a comparable but at least slightly different product. Restaurants, are an example, all serve food but of different types of food and in different sites. Manufacture costs are above what could be attained if firms sold equal products, but consumers have an advantage from the variety.

Existing Competitors. Rivalry among competitors within an industry use price discounting, new products, marketing, and other techniques to be competitive. Profitability of an industry suffers from high rivalry. The intensity with which companies compete and the basis on which they compete determine to which degree rivalry brings down an industry’s profitability (Porter, 2008). Pure competition is considered by economists as a competition with a high

Monopolist and oligopoly market structures are more common. Monopolist markets consist of several firms producing similar products. These firms are in competition with one another and have low barriers of entry into the market. Even though they face competition with other firms, monopolist make strategic decisions for their firms without much thought of the competitor’s actions or reactions. Dove will manufacture and sell their soap without regard to what Ivory may be producing or the selling price of Ivory soap.

The major concern of Competition Act is to deal with anti-competitive agreements, abuse of dominant position, combination and regulation of combination. Few of these are discussed below with their specific provisions:-

Market structure is best described as the authoritative and different parts of a business sector. A perfect competition industry framework is one that involves various little venders and purchasers while a monopolistic competition relates to an industry foundation that has attributes of rivalry and imposing business model. A pure monopoly model industry base contains a solitary maker or supplier of an item or an administration that has no nearby substitutes while Oligopoly is an industry framework that is commanded by a set number of firms that capacity autonomously of each other.

A highly competitive market wherein the corporations compete in lobbying for clients, profit margins tend to be tremendously low. It should be mentioned, however, that competition can take area now not best at the level of fees. Enterprises also can attempt to advantage gain through citing the product from others - for example, thru its development, to offer extra services associated or through in-depth merchandising of their emblem. Create relationships with clients - as an example with the aid of creating loyalty applications, exploitation of friendship and familiarity, or even through vertical diversification, or acquisition of shares in the purchaser organisation. Create or use of latest, non-well known distribution channels. Price opposition - presenting merchandise at a lower fee by means of giving up part of the margin or lowering production charges. There is many factors that affects the level of competition. The severity of competitive rivalry is different in each market. Most often competitive rivalry in the market intensifies in the case of at least some of the following elements: A huge range of competitors - in markets, which can be divided among a huge number of smaller competitors, there may be generally lots more excessive competition than the ones ruled via some firms. Low marketplace increase -

There is a constant competition around every system that uses capitalism as its economic system (which by now is almost the only economic system functioning in the world). Competition is a natural and expectable consequence of the markets economy. The philosophy behind competition is the assumption that every individual in society is looking for his or her own good, their own self-interest, which is part of the human culture and generates a series of decisions in which people are able to function in society looking out for their best interests. It is in the interest of anyone to have access to the products and services that we all require every day; therefore we will use our capital in the most efficient way to get our best good for the minimal price.

To identify an appropriate strategy for a given industry one must look into the external and internal factors influencing the company. This Schnell Air report has been conceived with a triple objective in mind: to provide the Schnell Air Board with (i) a brief and compelling synthesis of Schnell Air’s competitive market environment overview since it entered the Innsbruck – Turin route in January 1997 as compared to prior to its entry, (ii) analyse the available data to establish the extent of predatory pricing strategies being plotted by the two existing duopolies – Air Turin and Innsbruck Air and (iii) by using a Game Theoretic approach model and highlight the affect of a 4th daily service on the same route given the