Grade 8A
News 1: Increase Competition Among Banks to Help Small Businesses
News 2: Energy: Is there enough competition in the market?
News 3: Cement firms to face more competition after inquiry
News 4: Can India's traditional family firms beat competition?
News 5: More competition in banking depends upon a more feasible plan
News 6: Competition Commission orders two healthcare groups to sell nine hospitals
News 7: European Commission rejects Google's latest proposals to settle antitrust case
News 8: Car insurance too high, says Competition Commission
News 9: Google, the EU and antitrust Search over: The third attempt at a settlement is likely to be the last
News 10: Ed Miliband to call for banking competition inquiry
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Case Studies based Question
Please read above mentioned news articles and use the information in preparing your article for the given question. I will appreciate if you use other referenced information in support of your answer.
In business competition encourages the firms to be more efficient, productive and cost effective. It helps them to gain greater market share, maintaing higher profits and boasting themselves as a market leader. But all this comes at a cost. Firms spends lots of resources to maintain their advantage over the rival firms through price and non price competing strategies.
March 2nd 2014
Please Write Your Response in 500 Words
Note:
1. Write with references.
2. Market evidences in support of your reasons.
3. Marks allocation for this article is 20
Rubrics for Marks.
A. Theoretical Explanation 5 Marks
B. References. 5 Marks [Use Harvard referencing style]
C. Use of Key words. 5 Marks
D. Examples from various Markets 5 Marks
This comment has been removed by the author.
ReplyDeleteIn economics, competition is when a business which is doing the same business activity compete against each other to increase profit, market share, and sales by varying the elements of the marketing mix: price, product, distribution, and promotion. There is two types of competition which is price competition and non price competition. Price competition involves business competing to offer consumers the lowest possible price of goods or service. Some ways to cut price are by economies of scale, more efficient in production and in using the resources, and by discounts. Non price competition involves competing on product features rather than price. For example by increasing the quality of products. For example when coca-cola compete with Pepsi. They compete by making advertisement. They also hired celebrities to advertise their products.
ReplyDeleteConsumer may benefited by competition because competition makes business compete to create the best quality for the products. Consumer may also benefited by decreasing price of product. Business compete to increase their customer base because by increasing their customer base they could sell more and increase their sales revenue. It will also boost profit. For example in 1994 Emirates airline only have 33 destination. But now they fly to 138 destinations in 78 countries. Business also compete to increase sales because more sales can generate profit. Cutting prices and advertising can increase sales. Business also compete to expand market share which is the proportion of the business over the total market share. By expand market share they can increase sales. For example in 2011 Android have 36% of the Smartphone share in world market, Apple iOS for 26% in second place followed by RIM Blackberry 23%, and others 15%. Business also can increase the quality of their product to gain prestige. Also increasing their consumer satisfaction so that they will trust and continue to buy their product. Above all business compete go maximize their profit.
But firms often decrease their price too much so they offer worse quality of product to customer. Competition of big business with small firm can be unbalance so the small firm may not grow or close down. Business also sometimes force to decrease their price in some cases until below their break even point in order to win the competition. It also may cause negative environmental effect. For example to many billboard may hide natural landscape and cause visual pollution.
For me competition is not more beneficial to consumers then to firms for providing better quality of goods and services.
References :
http://en.wikipedia.org/wiki/Cola_Wars
http://en.wikipedia.org/wiki/Competition_(economics)
http://www.nielsen.com/us/en/newswire/2011/android-leads-u-s-in-smartphone-market-share-and-data-usage.html
http://en.wikipedia.org/wiki/Emirates_destinations
Dan moynihan and Brian Titley. (1). Competition. Why do firms compete. 1 (1), 252-254.
100% unique contents
First of all, competition in economics means the rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix, such as, price, product, distribution, and promotion. There will be competition between the firms in producing their product in order to give efficient production for their consumer. With this, they also increase their profit and make their firm or company as a market leader. Each firm will have different strategies in order to win the competition. They will spend more resources to make their product more efficient, productive and cost effective. Competition itself can bring benefit for the consumer then to firm. We will discuss about the advantage and disadvantage on the next paragraph.
ReplyDeleteCompetition can bring benefit for consumer, because with competition firm will compete in produce their best production. Which means that they will give good quality with lower price. Consumer always want to buy the best quality with low price, that’s why some of the firms did that. In a competitive market, prices are pushed down because they will give the lowest price that they could give for a particular product, because people want to buy a product with lower price. Not only is this good for consumers - when more people can afford to buy products, it encourages businesses to produce and boosts the economy in general. Competition also encourages business or firms to improve the quality of goods and services they sell in order to attract more consumer, because of course consumer want to buy a good quality product. New innovation is produced by the firm, becausse they want to produce something unique and different from others, which also can attract more consumer because they will have more choice. For example is apple company and blackberry company. In order to win the competition, both of them release the newest production from their company. Iphone company release 5s which have the newest technology, finger print, but they sell it in high price. They make that product in order to get the market leader of smart phone. Blackberry also release Z10 and Q10 in order to still keep their company in the competition. With this, consumer get the benefit from both of the company, because we can get the product with the best quality.
Besides of its benefit, competition also bring disadvantage. Some of the firm want to sell their product in very lower price, so they can give a bad quality of the product. It happen because they will use the low quality of resources. They think that lower price means bad quality. Other disadvantage is that it lead to some firms exploiting people in less developed countries. And if the firm is lose in the competition they can get loss, because of the limit profit that they get.
In conclusion, i agree that competition is more beneficial to consumers then to firms as it provides them better goods and services. Competition can give consumer better quality, lower price with more choice and the newest innovation.
References :
1. http://ec.europa.eu/competition/consumers/why_en.html
2. http://en.wikipedia.org/wiki/Competition_(economics)
3. http://wiki.answers.com/Q/Disadvantages_of_competition?#slide=7
4. http://smallbusiness.chron.com/advantages-disadvantages-competitive-workplace-16085.html
86% originality (www.plagiarism.net)
vienetta christina 8A
In economics, competition is defined as rivalry among sellers trying to achieve such goals as increasing profits, volume of sales and market share by varying the elements of the marketing mix: promotion, product, distribution, and price. It helps consumers get a good deal and encourages firms to innovate by slack reduction, putting downward pressure on costs and providing incentives for the efficient organization of production. And, competition is a central driver for productivity growth in the economy, and hence the International competitiveness. Market that categorized as competitive exist when there is genuine choice for consumers in terms of who supplies the goods and services they demand. Competitive markets are characterized by various forms of price and non-price competition between sellers who are bidding to increase or protect their market share. In addition, competition benefits everyone by enabling us to choose from an array of excellent products at affordable prices. Consumers stand to gain the most from greater competition in the market. In general, there are at least Three Parties regarding market Competition. Consumers ; Consumers stand to gain the most from greater competition in the market. Fair and open competition means lower prices and greater choice. Limiting consumers’ freedom of choice stalls innovation. Impediments to innovation are a setback for anyone who wants tomorrow’s. Market conditions that permit a single company to become the sole judge of price and quality set a dangerous precedent. Firm/Industry ; Fair trade and open competition in the market enables vendors and manufacturers to deliver a greater variety of competitive products to their customers around the world, and usually results in lower prices and higher performance. When competition allows market forces to prevail, leading technology companies can offer the best products to a broader array of customers and consumers. Government ; Enroll to maintain fair competition through competition commission. Competitive pricing, product innovation and performance improvements coupled with competitive practices help ensure that government authorities get the best value for the public they serve. Furthermore, transparent and unbiased procurement practices are essential components for open government and a healthy free market economy. Concerning the policy of the Government of The United State of America intending increase competition among Banks in 1994, we found that banking competition can help small businesses by increasing access to credit, allowing small businesses to operate independently rather than potentially being acquired by public companies. Corporations provide valuable nurturing to small firms when corporations acquire them. Without corporations, which can mobilize assets and expertise better than small firms, the economy would produce fewer innovations. Deregulation allowed more innovation from private firms. Prior to these changes, private firms had primarily been dependent on external financing. But with the increased access and opportunity to receive credit from local banks, smaller firms could finance more innovative projects and remain independent from public company acquisitions. These private firms experienced a total of 7.6 percent more patents and 6.4 percent more citations three years after branching deregulation than firms in states with the most restrictions on interstate branching. Conversely, deregulation reduced innovation from public companies. As smaller firms continued to operate freely, the pool of potential targets within a state contained less innovative firms for corporations to acquire after deregulation. Frequent acquirers based in these deregulated states experienced a bad effect of competition of banks, leading to an overall decrease in state-level innovation.
ReplyDeleteTargets acquired after deregulation produced 21 percent fewer patents over their lifetimes than targets acquired before deregulation. These findings imply that competition among banking sector can potentially help small businesses and consumers become successful by helping banking regulators better understand the effects of rules. But, the impact on public companies and overall state-level innovation decreases due to smaller organizations being able to maintain financing and operations on their own. The opposite occurs to Britain's Energy Market is being dominated by The Big Six Electrical Suppliers, which provide about 98% of all household energy and gas and control 74% of electricity generation. Of course, there was a problem across the situation elsewhere and is worse elsewhere because there are fewer competitors in the market. Some national markets have only one supplier. But it's not enough to just have more than one supplier. Questions are being asked over whether consumers across Europe get a fair deal. While selling large sale or wholesale energy prices rise, the debate will get noisier. But making the market work better could require unplugging the industry's complex structure and rebuilding it. In conclusion, Competition will produce some potential gains, such as lower prices for buyers, A greater discipline on suppliers to keep their costs down, Improvements in technology with good effects on production methods and costs, a greater variety of products (giving more choice), a faster speed of invention and innovation, improvements to the service quality for consumers, and better information for consumers allowing people to make more informed choices. Overall impact of increased competition should be an improvement in economic welfare. It means Government, Firm, and Consumers are gain beneficial regarding market competition, though consumers gain most.
ReplyDeleteOriginality: 85%
References:
Deletehttp://tutor2u.net/economics/content/topics/competition/competition_importance.htm
http://www.amd.com/us/aboutamd/corporate-information/fair-and-open-competition/benefits/Pages/benefits-of-competition.aspx
http://www.politicaleconomy.org/competition.htm
http://antitrust.oxfordjournals.org/content/early/2013/02/04/jaenfo.jns008.full
Competition between firms refers to the activity of companies which competes against each other using one or more ways in order to achieve particular business objectives. Competition is executed by firms in 2 main ways, inclusive of price strategies and non-price strategies. Price competition involves competing to offer consumers the lowest or best possible prices in order to win customers from other competing firms, and takes advantage of the relationship between consumer Demand and Price. Non-price competition involves competing on all other product features other than price, among other things new product development, extensive product quality, after-sales care, advertising, and issuing customer loyalty cards.
ReplyDeleteCompetition poses both advantages and disadvantages to both consumers and firms. Price competition of firms is generally beneficial for consumers. As a high level of competition suggests that less revenue will be received by each competing firm, they will try to take advantage of the relationship between consumer demand and selling price, or in other words to reduce the price they sell at to gain consumers that used to purchase the competing firm’s products. In the consumers’ point of view, they can enjoy lower market prices as more firms engage in the price war. Consumers are benefited if the market type is either perfect market competition or monopsonic market. In the perfect competition, the demand for a product is as large as the supply, and equilibrium of price exists, and this type of competition automatically disables any one individual to influence the market price. On the other hand, a monopsonic market is where the number of buyers is much less than the number of sellers, in other words the demand is less than supply, which causes a drop in selling prices as the firms try to compete for that small number of consumers. An example of a competition which benefits the consumers –in this case, small businesses- is the competition of banking services in the US. It shows how an increase in competition among banks allowed by the United States Congress results in a significantly lower interest rate which benefits small businesses to start up or expand their business. But as a consequence, more of those small firms are not willing to be taken over by large firms, and resulted in a decrease of innovation in the economy, calculated by calculating the number of patents before and after the Congress relaxed banking restrictions.
In contrast, certain types of competition, among others: monopoly, duopoly, and oligopoly, benefits the firms that has major control over their market but can allow them to exploit consumers. These are considered as low competition as generally only a few firms compete and therefore makes barriers of entry for new firms. An example of this is how Google managed to take advantage of the high demand for space in people’s search results by making auctions, but is fortunately interfered by European Commission, and the results are still currently unknown. Another example is British oil and electricity supplier Big Six which took advantage of its control over the market, which is over 98% of all household energy and gas and 74% of electricity generation, to increase their prices and ultimately generate extremely high amounts of profits. In the cases of pure monopoly markets, only exactly one firm supplies everything in the market, and is able to completely control the market price and results in consumers paying much more for what is supposed to be much cheaper. Even though this is not beneficial for consumers, the firm is very benefited as they can make extreme profit margins. Another example is the UK cement producer which controls almost the whole market. This lack of competition was costing cement users around $30m a year.
ReplyDeleteTo conclude what we had discussed, the economy should try to create a perfect competition in order to avoid consumer exploitation. A lack of competition causes the controlling firm to take advantage of their control, while too much competition makes more barriers for entry of new firms even though it benefits the consumers.
Ivan Alexander 8A
100% Originality Based on http://smallseotools.com/plagiarism-checker/
Reference:
Complete Economics for Cambridge and O Level Second Edition by Dan Moynihan and Brian Titley.
http://www.huffingtonpost.com/jess-cornaggia/increase-competition-amon_b_4077929.html
http://www.huffingtonpost.com/jess-cornaggia/increase-competition-amon_b_4077929.html
http://www.bbc.com/news/business-25018828
http://www.bbc.com/news/business-25725490
Competition is where two parties compete each other to gain customers. This competition was also encouraged by the government as the government are trying to avoid monopoly of the business and as there are competition, the business would use their resources efficiently where to reduce their costs and to lower the selling price. As the lower the price of the product is, the more customer are intended to buy which by doing so, it could be affordable for more people, and as the sales and revenue increases. There are two types of competition strategies which are price and non-price strategy. In the price strategy, the lower the price of the product, it would increase the quantity demand as it is affordable for more people. And as for the non-profit strategy, is that it is by advertisement, it could be advertisement in the magazine,newspaper,online,television, and more.
ReplyDeleteAs firms compete with other firms is that because they would want to have higher brand image, which because of this brand image it would make a customer brand loyalty which means that the would be loyal and keep on buying the products of the brand. For example, Apple has a high brand image of iphone where even people still buy the mobile phone in high prices, like iphone5s, now the price of the phone is 10.5million where LG produces Nexus which the features are better than iphone where yhe price is only about 3.3 million. Even though Nexus has better features and cheaper price, more people are buying iphone which costs 10.5 with least features, it means that brand image is also very effective in the competition against another firm. As there are competition between the two parties, they would try to produce superiority goods or higher quality goods and services which would attract more consumer as they would win the competition. As they would tryy to produce best quality goods, consumers would be benefited as they could receive higher quality goods or superior goods and services in lower price. If the firm is eagerly trying to win competing, they could use predatory pricing which where it involves of deeper cutsin prices, oftenlu below cost even though as they gain loses, where if they are successful at removing the competitor, they could raise the prices again and recover its loss. But if it doesn't work, it could lead to extreme amount of losses. Which by then it would be said to be risk bearing. As when there is predatory pricing, consumers could have even cheaper price of the product as they are conpeting. As for the business if they are successful, they could have inventions which made them as monopoly where they control the whole market and where they would gain abnormal profit. The competition is usually good for the consumer in that it in increases product variety and lower prices.
As if the business is monopolizing the market, the business could increase yhe price as the customer would need to buy in higher price as because of there are only one big producer. And as there are no competition there would be consumer less choice. In competing with competitor, it is risk bearing where if they fail, it could result to an extreme loss but if they are successful, it could lead to more profit. As if they are connected to the price war if the conpetition, it could lead to penetration pricing where prices are decreased to have higher sales and more affordable people to purchase the goods and services. Where if they are vey desperate, it could cause to destruction pricing where the price is decreased below the cost where it would make lose to the business, just to get rid of the competitor. And for the competition it could be useful and making liss as they need to advertise where advertisement are very expensive, and if they fail, they could have a large amount of losses. This advertising expenditures would reduce profit.
ReplyDeleteSo, in conclusion is that consumers would have more benefit as when competitors compete each other by having lower prices, product variety, superior goods and services. Well as for the competitors if they succeed they would have benefits but it is risk bearing where if they fail in competing it would cause a large amount of loses.
Refference: Complete Economics for Cambridge and O Level Second Edition by Dan Moynihan and Brian Titley
Unique Content:100%
Brian.A
8A
in business there will be always a competition between between businesses and other businesses. they compete to get many customer. they compete to get higher profit, more customer,market share, increase in customer base, achieve product superiority and brand image. Nowadays competitions has develop an opportunity to benefits publics in many ways.the company fight to get the advantages for themselves and the others.there are two types of competition, price competition and non price competition. the business use some strategies to win a competition in the market. the strategies are pricing strategies and advertising. They use advertisement to lure the consumer to buy their products. The business not just find an advantages for themselves but for the consumer too.
ReplyDeleteThe benefit of competition for the consumer are lower consumer price because the business reduce the price of the goods to win the consumer. The example of lowering consumer price is the Lenovo smartphone. Lenovo make a smartphone that have the same feature like the Samsung smartphone with the price lower because Lenovo know if they sell the smartphone over a price of 7 million rupiah, people wouldn’t buy it because the Lenovo is not famous for smartphone but its famous for its laptop product. The business usually offer lower price, they give a discount, promotion, coupons, and voucher to the consumer. The example are, every year the business give a huge discount for the product every year t for the product, this benefits the business to because it can increase the company sales and the company market share. The other benefit is the improvement of the product and service quality.. The business that are not able to beat the other business in price may improve the quality of the products to the consumer and to satisfy the consumer. The example are the Apple company the Apple company every year launch a new iPhone because they get an idea of the new iPhone with a better quality and new features. This benefits the business too because the consumer buy the new iPhone every year and it can increase the company sales, profit, and revenue. The other benefit is the consumer can get information about the product because the technology nowadays are sophisticated. They can go to the website of the company or the advertisement in Youtube and gather the information about the company products and the other company products information. This can help the consumer to compare the informations about the products and other products. This also help the consumer to make decision to buy the products or not .The other benefit is the business responsive to the consumer wishes. The company always responsive wishes because they always do the market research about the consumer demand. For example is the Apple company again. The Apple company always launch the new iPhone because they respond to the consumer wishes about the new phones feature.
Every advantages there are a disadvantages. If one company win the competition there will be a monopoly. The monopoly will be disadvantages for the consumer because the less consumer choice and lower product quality just like the PLN. If the company lowering the products cost will be a loss for the company and the consumer because the price is not guarantee the quality because may be the business make the product using a low quality material too. It can decrease the company quality and profit.
My conclusion is competition is normal. The conclusion of the competition is beneficial because it give consumer better quality, save the consumer money, and product variation.
ref
complete economics for cambridge IGCSE and O level by Dan Moyniham and Brian titley
orginality 100%
A competitive market is one in which a large numbers of producers compete with each other to satisfy the wants and needs of a large number of consumers. Competitive markets exist when there is genuine choice for consumers in terms of who supplies the goods and services they demand. Competitive markets are characterised by various forms of price and non-price competition between sellers who are bidding to increase or protect their market share
ReplyDeleteCompetitive markets exist when there is genuine choice for consumers in terms of who supplies the goods and services they demand. Competitive markets are characterised by various forms of price and non-price competition between sellers who are bidding to increase or protect their market share.
Firms compete for market share and the demand from consumers in lots of ways. We make an important distinction between price competition and non-price competition. Price competition can involve discounting the price of a product to increase demand. Non-price competition focuses on other strategies for increasing market share.
Consider the example of the UK supermarket sector where non-price competition has become important in the battle for sales: traditional advertising,
store loyality card, banking and other services, home delivery system, discounted petrol at hypermarkets, extention of opening hours.
competition for governments leads to better governance. In choosing where to live, people can compare public services and taxes. They are attracted to towns that use tax dollars wisely. Competition keeps town managers alert. It prevents governments from exerting substantial monopoly power over residents. If people feel that their taxes exceed the value of their public services, they can go elsewhere. They can, as economists put it, vote with their feet. Corporations benefit from various government services, including infrastructure, the protection of property rights and the enforcement of contracts. But if taxes vastly exceed these benefits, businesses can — and often do — move to places offering a better mix of taxes and services.
Consumers stand to gain the most from greater competition in the information technology (IT) market. Fair and open competition means lower prices and greater choice. Limiting consumers’ freedom of choice stalls innovation. Impediments to innovation are a setback for anyone who wants tomorrow’s computing technology – or any technology for that matter – to be better than it is today. Market conditions that permit a single company to become the sole judge of price and quality set a dangerous precedent.
I agree the consumer get more benefit from competition because they can satisfy their need with good quality of services n goods then consumer have many choices for good and services they want, then consumer is key for win the competition.
Business competition five many benefit for firm and especially for consumer because consumer is important character to win the competition.
Example: samsung and apple company, they are compete to be number one in handphone markets, effect the competition for consumer they get good quality of handphone, increase consumers satisfaction and improve the quality of life for consumers.
Refference :
Www.amd.com
Www.tutor2u.com
Originality: 72%
Competition in economic means the rivalry between firms which one seller tries to get what others are seeking at the same time, it can be a tough competition in the market economies such as Apple company with Samsung company.This can be sales, profit, market share and control of the market, they can attract consumers by offering the best price, quality of output and service. There are two types of competition, price and non-price competition, example of non-price is advertisement and quality.Advertisement can be persuasive or informative, which give information to the consumers about their product.However, competition can be more beneficial to consumers than to the firm itself, but aside from the benefit, there are also some effects and disadvantages that the consumers and firms will receive.
ReplyDeleteThe advantage firstly for consumer is reduction in cost, firms will reduce the cost of selling the goods as they compete to attract the customer while the customer can buy the goods at lower price than before.The example of the competition is different owner of bank branches open and compete through the IIBEA in 1994, also, the small firms or customers get benefit in increasing the access to credit which allows them to become more innovative and to operate independently than being acquired by public companies.Like in period 1976 to 2006 the banking competition reduced the state-level of innovation in public corporations.Another example of firms competition is India’s traditional family firms such as Tata,Reliance and also Birla Group. Third, they compete in quality in order to increase the sales which it is one of their goals so that they can more profit, thus, in this way, customer receive higher quality of goods with lower price, this benefits the customer than the firms.
While the disadvantage that the consumer might get is they will get confused as a result of too much choices offered by different firms. Also, to the firms, some of the firms will fall in the market economies if they fail to attract the customers, this effect the financial condition and may end up closing.This can cause lack of competition to the market and small firms cannot compete.For example: The commission told Lafarge Tarmac, a large cement firm to sell one of the plants so that new firms are able to compete in the market to increase the competition.Lastly, customers may get too much advertisement from many firms causing them to purchase the best product and the firm will get a decrease in sales.
In conclusion of above,competition is more benefit to the customer than to the firm because of many reasons such as reducing in the price of the product, increasing the access of capital for the small firms by banks and also customers will receive higher quality of product as firms attract their customers.While it is less benefit to the firm because some companies may fall to compete and decrease its sales although their benefits are increasing in profit and also may get a chance to have a brand image.
References:
1. http://www.bbc.com/news/business-25725490
2. http://www.bbc.com/news/business-26083217
3. http://www.huffingtonpost.com/jess-cornaggia/increase-competition-amon_b_4077929.html
4. http://www.ask.com/question/how-do-consumers-benefit-from-business-competition
5. http://www.businessdictionary.com/definition/competition.html
6. http://uk.answers.yahoo.com/question/index?qid=20120430162841AAl030x
Originality:
1. 91% (plagiarisma.net)
2.100% Unique Content (smallseotools.com)
Felicia Angeline 8A
Competition is the competing among sellers trying to achieve goals as increasing profits, market share, and sales volume. Firms compete in price and non-price factors. Consumers often benefit from increased competition in differentiated product. We consider consumer benefits from increased competition in a differentiated product in market. Consumer is benefited because of: 1.Low prices is the simplest way for a company to gain a high market share is to offer a better price. In a competitive market, prices are lower than normal price.
ReplyDelete2. Higher quality in competition also encourages businesses to improve the quality of goods and services they sell to attract more customers and so they will have higher market share.
3. More choices in a competitive market, businesses will make their products different from the other that are sold by the other firms. This make consumers can select the product that offers the right balance between price and quality.
Firms also will get benefit from competing they can have the market control it is where they are the one that controls the market, the profit earns is a lot more than usual if they gain the demand from consumers for their products, firms giving high quality of goods which cost less this can make their brand images in peoples mind this will make people to buy their product even though there are many other companies that even have better quality then them and has cheaper price but the people will still buy the first product because that firms has create their brand image in our mind.
The conclusion is that not always consumers will be benefited in market competition but firms also can get the benefit for competing in market.
Reference:
1. http://www.economicsonline.co.uk/Competitive_markets/Competitive_markets.html
2. http://www.ftc.gov/news-events/media-resources/mergers-and-competition
3. http://m.bbc.com/news/business-25018828
Originality 91%
Robin 8a
In economics, competition means rivalry in which every seller tries to get what other sellers are seeking at the same time : sales, profit, and market share by offering the best practicable combination of price, quality, and service. Where the market information flows freely, competition plays a regulatory function in balancing demand and supply. Competition causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. It is said that competition results in lower prices and a more number of good and services delivered to more people. There are two types of competition which are perfect and imperfect competition.
ReplyDeleteAs it is said above, competition encourages firms to be more efficient, productive, and cost effective. It helps them to gain greater market share, and maintaining higher profits and boasting themselves as a market leader. In a competition, the firms will of course reduce price and increase in quality. For example, if firm A’s quality is more higher, firm B will increase its quality too so that it does not loose with firm A. Because of it, firms that are in a competition will always try their best to compete with other firms by reducing prices at the lowest possible price and increase in quality so that more consumers will buy their products. By this, the consumers will get the benefit because every firm has its own product and the product is at low cost and high quality. From your article above, it is said that competition will make lower prices for consumers ( like I said before ), a greater discipline on suppliers to keep their costs down, improvements in technology ( for making a higher quality product ), greater variety of products, improve in quality, and better information for consumers allowing people to make more informed choices. For consumers, it is an advantage for firms to do a competition because they will get lower prices, greater variety of products. Businesses will also be more efficient and more responsible.
Sometimes, a business forces competition. For example the business wanted to do competition and the business lower it price, but they forgot about the quality, so they use low level of quality. If they do that, consumers may not want to buy their products because of the quality. Other disadvantage is for example the business reduce it price too much with very high quality, it is true that many customers will buy their products, but they will get a loss if they do it every day. If the business fails to do competition, than they will make a very huge loss.
So in conclusion, I agree that competition is more advantageous to consumers because if there is a competition between two businesses the price of their product will be lower and the quality will be higher which make a customer happy. And if the competition fails, it is not a disadvantage either for a consumer because they can find other products to buy.
Audrey Tan, 8A
References :
http://en.wikipedia.org/wiki/Competition_(economics)
http://www.businessdictionary.com/definition/competition.html
Originality : 84% Unique Content
Competition is a rivalry in which every seller tries to get what other sellers are seeking at the same time: sales, profit, and market share by offering the best practicable combination of price, quality, and service. Where the market information flows freely, competition plays a regulatory function in balancing demand and supply. There are reasons why firms compete. A big firm loves to compete with each firm. Why? It increases their customer base. The higher the customer get, the higher profit the firms will get. To get a huge amount of customer, they need to increase the quality of their product and increase their services with an acceptable price. Next is to increase their sales. It means that firms will not always aim to increase to find a huge consumer but, also will tried to keep their existing consumer to buy more and repeat custom. Cutting the prices will also increase sales revenue from product for which demand price is elastic. Advertising and promotion can also help the firms. Next is to expand market share. The bigger the firms are, their market share will increase, by increasing their productivity. Next is to create branded image. By doing this, the consumer will wanted to buy the firm’s product more. It make the consumer believes that this kind of product is good. Like for example iphone 6. Why? Because the apple company, has made a branded image to our mind that make us believe it is good. The firm do all of this things to maximize their profit. The more competition the firm has, the more profit they will get. There are two types competition; non price competition and price competition.
ReplyDeleteThe advantage of competition for customer is that customer will get more options or choices for them to decide what to buy. The firms that win the competition against other firms will get the more customers than the other firms. If firms compete with each other, the firms will provide the best quality of goods or product and service with each other. So the customer will be better to choose what kind of product they wanted to buy. Another benefit is that, the firm will provide a acceptable price for the customer. They do this to win the competition. Why should they do this? Logically, customer will buy the best product with lower prices. Example is Lenovo mobile phone. They make their product better with low prices.
The disadvantage of competition for customer has many. Although competition is good for the customer because it increase product variety and lower prices, some people argue it can also be wasted. This is the cause of advertising. Advertising is the cost of production and can use up significant resources. People argued that using the resources are wasteful. That same resources can be used to provide goods and services to benefit consumer than advertising. Other disadvantage is customizing or developing product by rival firms can be a result in duplicated effort and use of resources. For example, competing cosmetic with pharmaceutical can harmed an animal.
So, in conclusion is that competition is not always beneficial to consumer. It can also be wasteful. The wasteful thing about it is advertising, but by advertising it makes firms become more popular. In rival firm poin of view, the firms that has advertising will be very dangerous.
References:
1. http://www.businessdictionary.com/definition/competition.html
2. Dan moynihan and Brian Titley. Unit 4,4 section 1 : why do firms compete, types of competition, advertising can reduce competition, is competition wasteful
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Competition in economics is defined as the rivalry between firms to achieve what other firms are trying to achieve at the same time. These goals include, but are not limited to, sales, profitability and market share. Competition comes in two forms: price and non-price competition. Price based competition is the situation when a firm prices its products according to the amount the rival firm is charging. Price based competition is usually applied for businesses selling similar products, as prices of goods may differ between firms although they have the same quality and features. Price competition can also be referred to as competitive pricing. Non-price based competition, on the other hand, is a marketing strategy "in which one firm tries to distinguish its product or service from competing products on the basis of attributes like design and workmanship" (McConnell-Brue, 2002, p. 43.7-43.8). Non-price competition involves advertising, research and development, quality service, and brand management.
ReplyDeleteOn one hand, competition is more beneficial to firms rather than customers. Competitions are done by firms so that they can achieve the superiority of being market leader. A firm which is well-known and has good recognition from consumers and non-consumers alike tend to be more profitable. Brand image and value is also an objective achieved from competition. An example of a company with excellent brand image, and therefore a competitive advantage, is Starbucks. Starbucks has covered every aspect of the business, starting from quality materials until ambience in their stores. Being one of the most significant coffee beans buyers in the world, Starbucks has the ability to control suppliers and minimize costs by ensuring that they are receiving the lowest possible prices for their raw materials at the best quality. Therefore, they are able to cut costs and maintain its brand image due to its size. It is competition that allows firms to be innovative and search for competitive prices, therefore it was competition that drove Starbucks to its massive size today. Starbucks has the ability to control prices in the market, as consumers are not only driven to buy Starbucks’ products because of its price, but because of its quality. Starbucks would then be able to gain more profits. Rival firms would also be able to improve their technology in an effort to compete with each other. Firms would then be able to increase efficiency, which will cut costs and increase revenue, and increase profits for shareholders.
However, firms require very expensive costs for capital, advertising and production in order to compete with other firms. Some firms may fall out of the market simply because they do not have enough capital to invest. Competition, however, greatly benefit consumers because they can earn goods at lower prices. Firms will try to press down prices in order to obtain a larger market share. Consumers would be able to experience the benefits by buying goods of the same quality with cheaper prices. An example of this is phone operators. Phone operators offer seemingly unreasonable promotions, such as free calls or text messages. This is an application of predatory pricing, a marketing strategy to set such low prices to drive competitors out of the market, or creating barriers to entry of new competitors. Firms may lose profits in the process, therefore it is usually done by large firms. The firm hopes to generate higher revenues or profits afterwards. Consumers will also benefit from better quality products and quality service. This is shown by the difference between private and public companies. Private companies tend to have better quality because they have to face competition from other companies.
On the other hand, products offered by the public sector don’t have such good quality and production is not efficient because they do not feel the need to compete with firms. Competition allows consumers to have a wider selection of products to choose from. Firms in a similar industry often have slight differences in their products, and it is up to the consumer’s brand preference to choose which product to buy.
ReplyDeleteTo conclude the statements above, competition are beneficial to both firms and consumers, but are sometimes more beneficial to consumers by lowering prices, better quality products and wider selection of products, while firms require expensive costs to compete.
http://www.dailyfinance.com/2013/10/26/how-starbucks-built-a-coffee-global-empire/
http://ase.tufts.edu/gdae/Pubs/te/OpinionSur_NevaGoodwin_Nov07eng.pdf
http://en.wikipedia.org/wiki/Predatory_pricing
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Complete economics for Cambridge IGCSE & O Level Second Edition
ReplyDeleteCompetition is the challange among sellers trying to achieve such objectives as rising profits, market share, and sales volume by: price, product, distribution, and promotion. If there are competition in firms to get attention and respon from consumers, its more benefit to consumers than firms. Perfect competition is a situation where all businesses offer the same products at the same price. In this situation, none of the businesses will have an advantage over their competitors.
Some firms have promoted their product very hard to get intention and to get market respons. Thare are price competition between each firm. Usually company compete in promotion, price, kind of product,differentiation of product, and brand. Like we know, company often make brand or slogan to promote ans distribute their product. They doing things to plant the brand in market's opinion. One of their strategy is make alot of slogan and war of price. Other example is blackberry and samsung also compete each other. Samsung launch new product and blackberry also launch their new product that similar with samsung's product. It make consumer have more choice to be chosen. Price competition also make consumer have more benefits. They can buy product that have a good brand, god quality, well known brand and good price. They also can choose the best models that consumer wants. Example of markets that have high competition is competition in provider hand phone. Some provider give the best price and the low price to get more consumers. Event , the company has a loss profit.
Consumers stand to gain the most from greater competition in the information technology market. Fair and open competition means lower prices and greater choice.consumer’s freedom became limited . Impediments to innovation are a setback for anyone who wants tomorrow’s computing technology – or any technology for that matter – to be better than it is today. Market conditions that permit a single company to become the sole judge of price and quality set a dangerous precedent
But the competition also have a bad effect to consumer. Consumer become consumptive . So there is a different in social class and can make a criminal appears. Another disadvantage is the absence of product choices, minimal profit, no reason for technology development, no economies of scale, and changes in production will result to losses.
In Conclusion , why do firm compete ? they compete to increase market share, brand image , profit. They compete by advertisement , slogan . And market competition creates a lot of effects to consumers , consumers can have more choices , like example , just now samsung launch their latest product which is galaxy s5, Iphone’s latest product is 5s ,theirs features some are the same, finger prints and also 8 mb camera , which make consumer have a lot of choices . but the competition also make consumers become consumptive , there will be a different social class , rich or poor , and make a crime. These is one of the disadvantages of market competition for the consumers
.http://en.wikipedia.org/wiki/Competition_%28economics%29
http://www.amd.com/us/aboutamd/corporate-information/fair-and-open-competition/benefits/Pages/benefits-of-competition.aspx
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In economics, competition is defined as the rivalry among sellers trying to achieve goals such as increasing profits and market share.When firms compete, they tend to use pricing strategies.Most firm will decrease the price of their products, thus benefiting the consumers.When these firms compete, they will lose certain resources.
ReplyDeleteBy competing, firms will gain more market share, sales and they can have the ability to hypnotize people to have a good or perfect image of them in their minds.But, in order to compete,these firms must sacrifice a lot of resources such as the price of their goods, raw materials, and such things.Consumers will receive benefits when these firms compete, they can buy products with cheap prices.When firms compete, the quality of their products will certainly increase, they will make sure that the utility of their product will be able to satisfy our wants.They must come up with a lot of new innovations for their products so it can compete in the market, all of these things that firms do when competing will benefit the consumers.Also, firms will have to spend a lot of money for research if they want to create an innovative product.An example of a firm that sells a cheap product with a good quality is Lenovo, their best phone has a better quality than the new iPhone 5S, but is much cheaper than the iPhone 5S.
Firms can also benefit from competing,they can increase their market share, maximize their profit and they can increase their sales.An example of a firm that often competes in the market is Apple.They compete so much that they have successfully created a perfect image of their products in people's mind.They basically hypnotized people into thinking that their product is the best there is.They achieved this image by competing just that much.One example to show their product's perfect image is when people prefer buying iPhone 5S rather than Samsung's S4 or Lenovo's best phone.Both Samsung's and Lenovo's products are much better and cheaper than the iPhone 5S, but people just won't buy them, they prefer to have the iPhone 5S as their phone.This shows that by competing, firms can receive some benefits too.
The conclusion is that, by competing, both firms and consumers will get certain benefits,I personally think that firms can benefit much more from competing because they can lead the market and create a perfect image of their products in people's mind.But I do agree that consumers will receive benefits when firms compete.
Jovan Pan 8A
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References:
http://en.wikipedia.org/wiki/Competition_(economics)