The Strength of Competitive Analysis

Managers generally consider the rivalry among competitors as a major source for deriving strategy. As explained by the Michael Porter it is a narrow view of competition. A set of other parameters should be evaluated, mentioned in article as five competitive forces, along with industry

Monopolistic competition and Oligopoly are considered imperfectly competitive markets that are a result of few to many firms offering differentiated products. Differentiation of products impede substitution, which allow producers to earn higher than normal profits and thereby enhance shareholder wealth (Byrd, J., Hickman, K., & McPherson, M., 2013). Oligopolies are highly interdependent, with actions of one firm will resulting in a reaction from another. The interdependence results in higher efficiency as a necessity to compete with rivals. According to Claessens "greater development, lower costs, enhanced efficiency and a greater and wider supply resulting from competition will lead to greater [financial] access (2009).

Firm under perfect competition and the firm under monopoly are similar as the aim of both the seller is to maximize profit and to minimize loss. The equilibrium position followed by both the monopoly and perfect competition is MR = MC. Despite their similarities, these two forms of market organization differ from each other in respect of price-cost-output. There are many points of difference which are noted below.

Markets differ in a variety of ways including the degree of concentration and competitiveness, a fact which is reflected in the concept of ‘market structure’. Economists’ models link the structural characteristics of a market to the behaviour of firms in that market and subsequently to their performance. A key question therefore is how far a firm’s strategic decisions are shaped by the structure of the market in which it operates.

There are four widely recognizable types of markets: competition, perfect competition, monopolistic, and oligopolistic. The differences between these types of markets are dependent upon the

Perfect competition is an idealised market structure theory used in economics to show the market under a high degree of competition given certain conditions. This essay aims to outline the assumptions and distinctive features that form the perfectly competitive model and how this model can be used to explain short term and long term behaviour of a perfectly competitive firm aiming to maximise profits and the implications of enhancing these profits further.

A pure competition market may be be rare in the real world, but it acts as a vital introduction into the topic of markets. To

A number of competitive strategies have been stated by studies, such as the classification system created by Chrisman et al (1988). However, the generic strategies identified by Porter (1985) remain the most popular theory over the years (Allen et al, 2007).

4. Competitive analysis: - It is a critical part of marketing plan. It is an assessment of current and potential competitors. It helps to recognise Kiss the Berry’s weaknesses and strengths and opportunities over existing or new entrants. Its major competitors in Brisbane are COCO BLISS and CHARLIE’s RAW SQUEEZE.

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

“Marketing strategies can have a broad impact on the business in terms of instilling a marketing orientation among all those in the firm: the way of thinking or philosophy of the whole organization. However, marketing strategies can alternatively be seen as dealing only with the development of competitive advantages directly associated with the marketing function such as customer loyalty and distribution channel control. In the latter case, the domain is sometimes even further restricted by sole attention to the various element of the marketing mix rather than the more general issues of customer and channel relationships. There are two key

“Competition is not only the basis of protection to the consumer, but is the incentive to progress” – Herbert Hoover. The environments that today’s firms operate in are not static. The competitive environment they are operating in is constantly changing due to the entry or exit of competitors, changing technology and the demands of consumers. In order to maintain their market share and profitability, firms must continually assess and evaluate their competitive environment. Evaluating the various market forces firms’ face, and their effect on the competitive market ensures that an organization retains a proactive stance to the competitive environment. Instead of just accepting the status quo, organizations that actively examine and analyze their environment can then make choices and develop strategies that take advantage of the competitive situation or affect it to the firm’s benefit. This proactive stance to the market allows organizations to create value and position themselves for long term success. Firms that do not remain proactive and continually scan the competitive environment run the risk of being blindsided by innovation in the environment or significant changes undertaken by the competition.

Competitive advantage is the point of power for any organization as it is the point from which an organization can maximize it's profits if it's been planned for it well .

Table 1. Coordination mechanisms for collective strategies Coordination mechanism Regulative legislation Contracting Mergers Joint ventures Interlocking directorates Trade associations Collusion and industry leadership Degree of formalization High High High High Moderate Moderate Low

The manner in which firms are able to compete is most commonly categorized by implementing Michael Porter’s strategic typologies. Porter’s strategic theory has been the most widely accepted strategic approach used by fellow academics (Kim and Lim 1988; Bordean et al 2010). Porter proposed three generic strategies namely: cost leadership, differentiation and focus strategy. Warszawski (1996) later introduced a competitive strategy