The Rising Competition Between Estate Management Companies

very broad one, meaning that industry competition can be very diverse, and indeed it is. The

The author also brings up how sometimes competition can be harmful.

This force describes the intensity of competition between existing players (companies) in an industry. The results of high competitive pressure could impact prices, margins, and hence, on profitability for every company in the industry.

The model is based on the research findings of Michael E. Porter, a Harvard Business School Professor. The model was recently updated in the late 1990’s and early 2000’s to depict what it is today. As you can see from the diagram, the dominating factor that the forces are based upon is the rivalry faced again existing competitors. When competition is high amongst competitors, the forces that revolve around the competition tend to intensify.

The article firsts starts explaining any company and their competitors know that global supply rises and falls, and demand rises and falls, GDP and weather etc. Where each industry have different strategies and in order to be successful you will need to beat your competitors to those strategies. Where companies are working in different sectors should make plans and developing in altered way, but studies showed they are not.

In the first chapter the authors propose economics to be the study of the affects of incentives. He backs up this proposal with three examples.

When companies are making decisions, the companies do not worry about how the rivals will react, in part to each company’s actions are unlikely to affect its rivals to a great extent hence they are independent. In addition, there is perfect knowledge in the market hence new companies have the freedom to enter into the industry. The companies are also profit maximizers, producing output where marginal revenue equals marginal cost; the profit maximising condition. Companies in a

Industry shakeout: A growing market and high profits induces new firms like Eagle Motors to enter market and increase production which again increases competition and rivalry.

This section highlights a very important topic as it points out the current focus on the urban elite. The urban elite make up a relatively insignificant portion of potential customers worldwide. If companies can find a way to serve even the poorest of customers, growth potential would be practically unlimited and success all but guaranteed. The focus on lower pricing is an interesting and rather amusing point. Companies like Wal-Mart who have been chastised for their efforts to continually cut prices at all costs may, and more than likely have helped the global economy in the long run when it comes to cost cutting efforts because companies Wal-Mart deals with have already started to focus on how to be as cheap as possible.

Coase’s main points brought together in his introduction and additional notes, but drawn from his scholarly articles begin with the concept that the choice between how a firm is organized and how the market is organized is varied and will continue to be varied, but not because of changes in technology. Instead, both individual firms and the market as a whole are organized so that each attempts to minimize or economize inherent transaction costs. Coase goes on to explain that the study of these tangible and material transaction costs is actually a study of opportunity cost. Charlie Munger, Warren Buffet’s less media attention grabbing partner, explains opportunity costs very succinctly and points a finger in the eye of economic professors; “Everything is based on opportunity costs. Academia has done a terrible disservice: they teach in one sentence in first-year economics about opportunity costs, but that’s it. In life, if opportunity A is better than B, and you have only one opportunity, you do A. ” This is Coase’s point, that firms and the market deal with the information at hand and make decisions in a world of scarce resources. Given a choice between A and B, then the one with the maximized value will be logically chosen every time. If in the real world study of a firm or market that the logical choice wasn’t chosen, then the economist has not values all the tangible benefits and costs that were weighed by decision makers,

In the real estate business it is important to have a wide and extensive social network. Encourage your birddogs to widen their network in both their community as well as in the real estate business itself. Local real estate investor or REI meetings are a great place to network with other industry professionals. Many times investors may come across good properties that just don’t fit their own investment criteria. In such cases they are likely to pass the property lead on to a colleague or friend in the business. On the flip side of this, encourage your birddogs to keep in mind the difference between friendly competition and all out rivalry. While their may be a finite amount of suitable investment property in your area, it does little for your long term business to establish a bad reputation with your colleagues. Like it or not, your birddogs’ behavior reflects directly on you.

In 1893 French economist Joseph Bertrand developed his Bertrand model of competition from his review of Antoine Cournots study of a Spring Water duopoly. His criticism lay with how firms in oligopolies compete. In his model firms compete with prices rather than Cornots quantities. (REFERENCE TO SPANISH JOURNAL)

Furthermore, there is an expansion of the market that brings about the division of labor under this “on-demand” economy. Price decrease leads to the expansion of market and population growth as competition formed among companies. For example, Alfred aggregates on-demand companies in

I really like this article. It provides a comprehensive view of a huge corporation entering a new market. It indicates how a difficult it is for a corporation to enter a market based on completely different culture, language, consumer concern and regulation environment. Especially in a highly-developed economy, the competitive level would rise because of more transparent information exchange, historical business background and the government intervention. It tells how

Competitions are ubiquitous. It may be in the form of us seeking a promotion at work, company competing for bigger market share. In fact, humans more often than not ,seek to achieve a superior position relative to others in a variety of contexts (Garcia, Tor and Schiff, 2013). Simply put, an undertaking with an aim of establishing gain by hindering the competitive edge of the rival party involved. In economic sense, in a marketplace, there are buyers and sellers for a product existing at variance, which would allow the price of products to change to counter the change in supply and demand. In todays times almost every product has a substitute alternative, hence, a buyer would have the convenience of switching to the cheaper alternative if price of a product becomes unaffordable for them. Hence, the buyers have relative influence on the price of the products. However in some industries there are only a few supplier of the products and services, due to the absence of substitutes, which reduces the bargaining power of the consumers on the price of goods, due to the producers having absolute power over the pricing of the goods.