Grade 8B
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.
Last date for Submission:
March 2nd 2014
Please Write Your Response in 500 Words
Note:
1. Write with references.
2. Market evidence 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
Every firm wants to get more customers in order to get more profit, and when they get more profit they can expand their business and improve their quality of product or service. All firms compete one another is normal in economics since all of them are trying to be the biggest share holder in the type of business theyre doing in the whole country or even the whole world. Inside the firm, they operate a market and the future fate of the market is in the hand of the decisions of the firms according to the price and output. First of all, there are 2 types of competition, price competition and non competition. Price competition is when the price controls the demand of the product or services. Its when the firm or someone make scarcity as the first point, example is if my electricity cables are broken, and I call somw electricians to repair it and I only want to spend $100, and I will negotiate with the electricians for the price of their service as close as possible or maybe smaller than the price I want to spend. And non pice competition is when someone or a firm has a lot of money and freedom to spend them all they want. They have the freedom to demand the best, and the example is I want my electricity cables to be the best and I don’t care how much I spend, I want it to last for 10 years, so ill cakll the best electricians and ask them to use the best cables too. There are five factors which influence the decisions, and they are the amount and size of the firms that the firm operates, product similarity, control of the firm for the price of output, not to expensive of too cheap, with no trouble entering aand quitting the markets, and the quantity of non-price competition. There are four types of competition in markets, perfect competition, monopolistic competition, oligopoly competition and monopoly competition.
ReplyDeletePerfect competition, actually rarely found or maybe doesn’t exist because its when theres bunch of sellers of the same product and a bunch of of buyers of that product which has the perfect knowledge/idea of how the product works or the function of the products. The example is in a traditional market, theres a bunch of seller that sell the same kind of fish, and theres a bunch of buyers that want to know the whole knowledge of what theyre buying, its impossible. The next one is monopoly competition, there, its really hard to enter and exit the market because it cost a lot of money and because of the high cost, its often to be restricted, usually the one who run monopolistic are the politicians or the government or the social groups. The easiest example is, the government can just set a monopoly to an industry that they want to control, for example is the electricity, its used by the whole community of that area so government will give subsidy for the people, like in Indonesia, government gave some subsidy to lessen the people’s burden. The next one is oligopoly competition, the strong groups control the price, and the industry are made up of several firms. The firms there most of the time are selling the same stuffs, for example is firmA Is selling 1kg of egg for $5, and firmB&C are selling the similar egg but they sold it for $2 per kg, and if firmA until decrease its price, that firm will get more market share because more ppl will buy theirs, which will force the other 2 companies to reduce their price too. The last one is monopolistic competition, there are a bunch of sellers of the same prouct which don’t set the price different so much from each other. And for the customers, itll benefit them ofc, because since the firms are competing, the common thing they’ll do is to reduce their price, increase their quality, their commercial and their service, and many more, and these effort they made is to increase the demand of their goods or services, and that will eventually benefit the consumers. Even though the firm will(maybe) get some losses because they reduce price and increase the quality, but the increase in consumer base have a chance to make that loss to not happen. So inconclusion, competition will benefit the customers, but for the producers, it depends on according how much the increase in consumer will be.
ReplyDeleteReference: imagination
http://www.slideshare.net/mscuttle/firms-competition-and-markets
http://answers.yahoo.com/question/index?qid=20080219100113AA1n82u
http://www.enotes.com/homework-help/give-real-life-examples-monopoly-perfect-111737
plagiarism: 100%
In every business in this world, there is a competition between firms of who is the best of the best. What is meant by a competition is the rivalry between sellers that are trying to achieve goals, like increasing profits, market share and the volume of sales that varies in the market. Businesses compete with each other to show the public who is the best of all, so that people will be willing to buy their products, increasing sales, expanding market share, and to achieve product superiority, to enhance image and to maximise profit. This competition usually happens between companies that has the same outputs or amount of sales and sizes of market share. A competition will help the firms to produce better quality. They will help firms to analyze what the customers want and will fulfill what they expect to receive from the firm. Customers will buy more of their product if they felt satisfied with it. They will expect better quality produced by the firms and will want products with new and high technologies. Because of these reasons, companies have been facing difficulties in producing the because of the big cost of sales.
ReplyDeleteThere are 3 levels of economic competition that have been classified:
1.) Direct competition, which is also called category competition or a brand competition, where products which performs the same function compete against each other. For example, like a brand of pick-up trucks competing with several other different brands of pick-up trucks. Sometimes 2 companies are rivals and both will add new products to their line so that each company distributes the same thing and they then they will compete.
2.) Substitute competition, where products that are close substitutes for one another will start competing. For example, butter competes and margarine, mayonnaise, and other various sauces and spreads.
3.) Budget competition. Things that are included in this category are anything that the consumer might want to spend their available money for. For example, a family that has $20,000 available may choose to spend it for many different various items, which can all be seen as competing with each other for the family's available money.
There are 2 types of competition :
1.) Price competition, is a competition which involves competing to offer conumers or best prices for rival products. One of the way a firm can boost it’s sales and market shares is by cutting the price below the rival’s price.
2.) Non-price competition, which involves competing on all of the other products features other than the prices. It includes the developement of new products, different place of retail outlets, advertisement or even running competitions and issuing consumer loyaltycards.
There are 2 main types of advertising :
ReplyDelete1.) Informative advertising, which provides information about a product to a consumer. For example, like bus and train timetables.
2.) Persuasive advertising, which is designed to create a consumer’s wants and boost sales of a product. (Brand switching)
Whenever a competition is usually useful and good for the consumers, but it can increase the product variety and lowers prices, which will reduce the profit of the producers. Advertising, giving discounts and lower prices can also cause the income of the producers to decrease. But, competitions that happen between businesses can also bring good impact for some firms. If customers are satisfied and love their product, then customers will continue to buy the brand even if the producer increases it’s price. These repeated purchase from customers provide a steady stream of revenue. It could help protect the sales and market share of the firm from competition.
So, a competition between businesses is not always more beneficial for customers. It may be beneficial for them because they might receive better quality and high technology products. But businesses will also receive benefits, whenever the cost of sales will increase. But once a consumer is satisfied with the products, then nothing will hold them back to buy more of it’s products. And this will increase the revenue of the company.
References : - Notebook - http://en.wikipedia.org/wiki/Competition_(economics) - News 1-9 -textbook
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-Regina T. 8B
Competition usually creates firms to try to make their product the best, cheapest ,most wanted and many more this is usually for their firms to be more well known , maintain high profits and boasting themselves as the market leader through price and non pricing strategy those this gives more advantage on customer or firms lets discuss about it , I will explain more below
ReplyDeleteCompetition is hard especially if there are more firm competing in that kind of business it could create many bankruptcy of firms because they could sustain the wants of the price and expense god example are Indian family firms such as (TATA, Reliance and Birla)in India there are a very huge amount of small family firms and this cause them problems such as many firms get bankrupt because the huge competition in the market
The advantages and disadvantages that it brings to firms because competition and benefits or disadvantages to the customer of the firms or company are such as this in below
First if there is a competition firms will fight over the one with lower price ,so firm make their price as they low as they could make it so the people will buy their product more than other products so the firm wont be bankrupt. so it gives customer advantages because cheaper product but this don’t bring advantage to the firm as they get less profit if a firm have less competition it will be like the energy company like PLN which can just higher their price directly because there are less competition PLN is the only electricity company in Indonesia .but it also gives customer disadvantages such as if the firms or company decreased their product quality till the price that customer want, this will gives disadvantage to the customers.
Second is firms will gives their very good service to the customer so it could make their customer happy such as customer will like the products better if the sellers or the customer service gives them very good service and repair man also directly will go to them such as fine examples are First media they are Jakarta strong wifi and television operator they gives fast service and good items because they have strong competitors such as indovision ,speedy and many more so they wont lost customers while PLN Indonesia electivity company wont because there are no competition on their market because they are the only electricity company in Indonesia. while this don’t benefit the firm because they must hire good worker that use a lot of money
So in my conclusion customer will definitely get bigger advantages than the firm because if there are competition firm will fight for who ever will be the one ruling over in the marker share , make most profit ,looking good in their customer and many more but in doing so they will also make less profit per item , get more expenses and many more disadvantages to the company while to the customer it will gives more advantage such as cheaper product and better service.
Sources:
http://www.bbc.co.uk/news/business-25018828
http://www.bbc.co.uk/news/business-26083217
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Competition is 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: price, product, distribution, and promotion, as defined by Wikipedia. Competition is the battle of sellers that tries to increase and fulfill their aims, which could be the profit, market share and maybe reduce the costs. A competition between companies can happen if both or more are focused on identical or similar sectors. With competitions going on between companies, many (Firms, consumer, government) could be benefited by this.
ReplyDeleteAs, with having a competition between two companies that are within the same factor, there could be disadvantage found, is that they can clash together, resulting with one falling and is too many falls, there would be less competition, encouraging the companies left to reduce their costs which would result in less quality goods, with this lack of competitors, this affect the other companies to not enter the competition, making the every lasting cycle of just few companies battling in the competition. Take for example, the retail energy competitions, back, in the 1998, there were about 15 suppliers but now it’s only left with six companies and with them merging with the retailing companies (Vertical Integration) this discourages new players to come into the market
There are some sectors which are usually essential (Ex. Army Force) that needs a large amount of capital to start, not many companies can start the so, this is where the government can come in, as the government has a big access to capital, allowing them to build a company according to the need of the country, which provides income for the country, but may be both a disadvantage and advantage to the consumer, as the lack of competition, the quality maybe bad but on the other hand, their needs get satisfied.
To conclude on what has been stated above is that with having a competition in the market, it could be both a disadvantage and an advantage to all the sides (Firm, Consumer, Government), if the market lack competition, it could decrease the quality of the products they produce, causing dissatisfaction to the consumer, but to the firm, less costs. But if there’s more competition, the company would have to produce better quality goods to not lose in the battle but in exchange they have spend more, so they have to juggle and stabilize the outcome and income, with this, the customer may be provided with better products/services.
References:
http://en.wikipedia.org/wiki/Competition_(economics
http://www.bbc.co.uk/news/business-25018828
Plagiarism Check:
97%
Grace - 8B
This comment has been removed by the author.
ReplyDeleteIn a county’s economics as well as global’s economics, competitions are always there. In a way, it brings benefits for consumers as consumers will be able to get lower prices goods and services as well as lower prices and larger varities of goods and services. However, although it might seem to bring negative effects for the companies, it actually also give some benefits to these companies. Competitions among companies in a market will automatically force these producers to improve their products and operational system to reach a point where they can be effective as to be able to read what consumers needs and wants; and also to be efficient as to be able to reduce their production and distribution cost in such a way so that they can maintain or even increase their profits and most important of all they can compete with other competitors price in other market. To be able to reach the effectiveness and efficiency, a company has to do some researches on developing their products as well as their competitors’ strength and wicknesses.
ReplyDeleteFor example, in automobile business in Indonesia we know that Honda and Toyota are two most powerful names in Indonesia, in fact both of them are rivals in most part of asia as well as in the united states. The competition of the two firms has actually drove them to be well known around the world. They constantly improves their cars as well as their target markets. They have produced many varities of vehicles for different markets segmentation. In Indonesia, Toyota and Honda has been here for many years. At first Toyota target on the middle up economic income families market segmentation while Honda, they actually are aiming for the lower income families market segmentation by producing motor cycles and the high incomes family segmentation by producing a very modern and nice cars. By doing this they actually have their own target markets and were doing very well. Through times as more automobile companies come to Indonesia their competition level is getting higher to survive in Indonesian market they will have to do researches and changes in their products and production methods that is why they actually build the factories to produce some of their vehicles in Indonesia as to reduced the shipping cost, labour cost, some of the raw materials cost that they need as well as distribution cost. This is why for Toyota as they do not produce motorcycles to reach lower income families especially after the economic crisis in the year 1998, they produce lower price vehicle calls “Avanza” this is based on their research to accommodate the market needs of having a low price SUV car that fits the hole family. They also improve and replace some of the higher cost to lower cost material for Avanza so that it will be able to set the reasonable pricing for this market segmentation. During this time, Honda was still doing well as their motorcycles were selling good. Finally in the year of 2012 where Avanza can be seen everywhere which means Avanza is the best selling car in Indonesia due to it’s size and price, Honda started to take the step of producing lower budget cars such as Honda brio which is a small, affordable and compact car that can meet the needs of the working peoples as well as small families. Moreover, they produce Honda mobilio in the year 2013 to compete with Avanza as in size, price as well as look.
We can see from the competition among Toyota and Honda in Indonesia, that actually the consumers are getting benefits from it as they are able to get the vehicles in lower price comparing to the previous times and also provided with good after sales service. As for the companies, the competition might be able to bring great profit for the company if they can attract the interest of the markets as they can get mass sales (earn profits by quantities ) and this automatically will also bring up their names in the market. However, since they have to sell in a low price which might be meaning they have a very small profit per unit, the risk is they might not be able to survive if their sales does not reach the target because we know that to reduce production cost we will have to do mass production to reduce the cost.
ReplyDeleteReferences:
• http://www.streetdirectory.com/travel_guide/59854/car_parts/competition_drives_honda_and_toyota_forward.html
• http://www.directessays.com/viewpaper/84387.html
• http://en.wikipedia.org/wiki/Toyota_Avanza
• http://en.wikipedia.org/wiki/Honda_Mobilio
• http://en.wikipedia.org/wiki/Honda_Brio
• http://en.wikipedia.org/wiki/Competition
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Vincent cia – 8B
Competition is the activity of firms in which they would try to sell more products than the other firm, in hopes of gaining a higher profit count and market share for the firm itself. In a competition there are 2 or more firms competing for the market share and sales of the market, because most goals of a business is to gain profit and they do that by having more sales. Having only 1 firm in the market would make a monopoly which means that one firm will control the price of the products. This is where competition is good for the consumers as firms need to compete in order to have the most market share of the firms.
ReplyDeleteI do agree that competition is beneficial for the consumers more than the firms themselves to a certain degree, because of few reasons
Because it provides the motivation for companies to be more competitive in selling their products, which means that better products are going to be made at a competitive cost if the firms wanted to be successful in selling those products. Which is very good for the consumers, as they will be able to enjoy purchasing high quality and competitive pricing products.
Another reason supporting the statement is that firms, in order to be competitive must increase cost of their products while reducing the price. Said method will increase the products popularity among consumers. An example would be the new Sony PS4, in order to be competitive against its competitors Sony’s PS4 cost $381 to produce while selling at $399, with only an $18.
But to that extent I agree to the statement. Because there are ways that a firm can be benefited, or the consumer not being benefited because of competition.
For example, the firm can actually learn from their losses to their competitors and be more innovative towards the next product. How this works is that when a firm losses to another firm in the market, they would try their best to outcompete that firm in another situation, when they are selling their newer products. And this might have a very beneficial long term benefit to the firm. This is reflected in real life as some firms after having losses hires the best designers to make a new and very innovative new product to outcompete the competition.
Another way I disagree to the statement is that there are situations where a consumer is the one having the losses, because of a firm competition. This would happen in an Oligopoly market, when there are competition between firms but a feel of monopoly as the competition amount is not enough to spark motivation to be competitive. But this can be easily removed by having more competitors in the market.
All of these reasons exist but in a non-ideal world in which we live in they happen so little, so they would be considered negligible.
To conclude what I have discussed, there are some exceptions to what the statement is proving, but those exceptions are negligible
References
http://www.forbes.com/pictures/emjl45fhdh/5-reasons-why-competition-is-good-for-your-business/
http://allthingsd.com/20131119/teardown-shows-sonys-playstation-4-costs-381-to-build/
I Have check With http://smallseotools.com/plagiarism-checker/ for any signs of plagiarism, the result shows my content is 100% Unique
PART I
ReplyDeleteCompetition may happen if two or more firms are rivalling with each other. Competition always happen because the firms who are competing have equal strength, power, size, etc. So, in order to win the competition, one of the firm should have its new market strategy which is more efficient, have lower cost of production in order to reduce unit price, have better features of products than other competitors’ products, and many other else, in order to achieve more consumers.
There are two types of competition. First is price competition, second is non-price competition. Price competition is the competition where competitors reduce their products price as least as possible, while non-price competition is the competition where competitors develop their products’ features to be the best, most useful, unique, and other factors that the other competitors haven’t innovate.
So based on above explanation for price and non-price competition, because consumers able to buy the product for cheaper price, or latest release products with latest developed features version which might satisfy people daily activities, so that it is correct that consumer will get more benefits than the firms. Another fact that may strengthen that statement, is during reducing the products price, of course the firm will obtain less profit or might be get loss. But those firms which are willing do that because they objected to invite more customers to buy their products.
The example of the firm which are willing to get loss in order to win the market competition but fails so that corrects the above statement, is Smartfren. In order to get more customers for registering smartfren operator, they make data packet which enable CDMA users to have unlimited calls and text messages for only 20.000 rupiah. They think those users will never make so much call so that they can get more profits but get more customers. Unfortunately, their expectation failed. Much users are interested but they are making so much call and text messages in order to maximize the data packet as maximised as possible. That will overload the smartfren’s operator server which may create unexpected expenses. Nowadays, all smartfren’s users are informed through text messages that they had changed the data plan and increase the price of the packet so that the unlimited calls will valid in a certain period of time with 50.000 rupiah.
PART II
ReplyDeleteBut sometimes, firms may get more benefits than consumers during market competition. This may happen if the firm successfully wins the competition. When the firm wins the competition, which may have more trust from public (like Nokia in 2007), they may re-stabilize the product price (back to normal price without reducing it) or activating the penetration pricing strategy anymore because their brand is already strong (like Samsung smartphones don’t care about the competition between LG and iPhone) so that the firm will get profit more or as normal without being reduced (like during the competition). Another reason is when the firm doesn’t reduce the cost, like during the competition of market, consumer will have to buy the products with normal price and normal products’ features development rate.
The example is Samsung. They still have much users, because they have already strong brand, even though they don’t use penetration pricing policy. Aside from having strong brand, they still keep developing their software features even though the rate of their products’ features development is not the fastest.
So, in the final conclusion, we may know if the firm has a failure due to their planning or strategy to win the competition and stay developing to win the market competition, that means the consumer still get more benefits because the firm hasn’t being strong yet for their brand so that they still have to do either price or non-price competition to stay competing with another firms. But if the firm has win the competition and successfully strengthen their brand, that means consumers may no longer get more benefits than the firm.
Reference:
Moynihan, D. and Titley, B (2012) Complete Economics For Cambridge IGCSE &O Level Second Edition. Great Clarendon Street: Oxford University Press. Unit 4.4 - Competition
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Competition is two or more forces fighting for control, there is a lot of competition in the business, example like two firms selling a burger, they must to compete so that consumers want to buy their product, and they compete each other so that they can get much profit if many consumers buy their product. It is said that competitions have more benefit or advantages to the customer rather than to the firms, it is correct, many competition compete to get the best for consumers, here is some of the advantages and the disadvantages of it.
ReplyDeleteYes it is correct than when the firm compete or if there is competition, it is more benefit for the consumers, why? Because when they compete each other, they will produce the best product and services so that the consumers will buy their product. Example just say like apple company and Samsung company are competing together, but what it the fact, apple product is more expensive than Samsung product, but the sales of apple product is higher than Samsung, it is because that apple have more good quality of product than Samsung so that all the consumers want to buy apple product. Second that if the company want to gain a higher market, they also can by lowering the cost so that consumers will buy their product and their market will be high. Third, in the competition, business will also make more unique, creative, and different product from other company, so that the consumers have many choices to choose which product they want to buy and so they can choose the product that offers the right balance of the price and the quality.
Well but not always that consumers always get benefit, there is a imperfect market, imperfect market have monopolistic that means have a large number of production and it is the same have monopoly, oligopolistic means there is many company, example oil market, car market, bus market , duopoly that means they only compete between two firms only, monopoly that means they have no competition, and monopsonic is a market situation where there is only one buyer. In this case we will discuss about monopoly, well monopoly doesn’t think about providing a best quality and product to the customer, why ? because in the monopoly market there is no competition, just take an example of PLN it’s a electricity company. Well they are not giving the best services to the consumers, we also can say that their services are very bad. But consumers still want to buy their product, because there is no other company that sell electricity, so if they have no good quality of product and good services, consumers will also want to buy their product. Some business also increase the competition to help small firms, like example the bank help to increase the credits of the small banks.
So in the overall the conclusion is the effect of the competition or when there are business and other company that competing is to the consumers, because when they compete they want to get many profit, so they gain their profit by increasing the quality of the products, lowering the price of the product and increasing the choices of the products, well but not always that it always benefit for consumers, PLN have a bad services and say that it is a disadvantages for consumers but consumers still buy their products. So the competition make greater benefit to the consumers than to the firms and the government.
References:
http://ec.europa.eu/competition/consumers/why_en.html
notebook
news 1-10
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Competition between firms is the rivalry between firms to achieve their objectives, which may include increasing their profits, market price, lessening their cost, etc. In the market, there are various types of competition. There is perfect and imperfect competition. Perfect market is when there are no monopolies present in the current market, they’re homogeneous, they sell large number of products and the price of those products also depends on the market. Imperfect market, on the contrary, has various competitions.
ReplyDeleteFirstly there is the monopolistic competition, in which the firms sell a large number of products, and they have the characteristics of a monopoly. In which the dominating firms control the market, for example, Apple. They control the market since they are the one that is profiting most and they are the biggest company hence if their prices rise or fall it’ll affect other firms too. Then there is the oligopoly competition, which is the biggest competition. It is a cutthroat competition in which a small number of firms control the market. For example would be the oil market or the car market. Another type of competition is duopoly, in which the market only consists of 2 firms/producers; a good example of this would be Visa and MasterCard. Monopoly is when there is only one producer for a certain good or service. There are no competitions an example of this would be PLN, PAM, etc. Lastly, there is monopsony, where there are various producers but only 1 customer. An example of this would be the people who study on nuclear science (there are plenty) and yet the ones who employ them is only the government (one consumer).
There are various benefits of competition between firms. There are benefits for the firms themselves but there are also benefits externally, for example competition will also benefit the government and also consumers. The advantages of competition to firms include:
1. Productivity and Effectiveness
Firms will learn how to be productive, to keep their employees working as productive and as effective as possible, also the easier it is to achieve their business objectives hence producing more products and maximizing profit earnings
2. Popularity
When a firm competes and is bigger or gains more profit than the other firms they usually becomes well known and popular amongst firms within the market.
3. Market Share
Their market prices will increase along with the number of products sold and so will their demands meaning that they’ll receive more profits.
However, competition doesn’t benefit the firms, themselves, most. Competition amongst firms will mostly benefit external parties, which include customers, government, and they will also affect the market. To the government the competition between firms will help make the country more developed and help them to move faster than other countries. For the economy, new innovative products and competition between firms will encourage economic development worldwide
As for consumers:
ReplyDelete1. Cost
Rivalry firms will discipline the producers to keep low prices. The lower the price the more consumers the firm will attract hence with firms competing against each other they will keep lowering the prices to attract more consumers. This will benefit to the customers since they won’t need to pay as high as the price was before.
2. Innovations
When a firm’s product’s demand is decreasing and they can’t think of any more ways to sell/advertise their product they usually start inventing new goods. Consumers will then have access to new more advanced goods.
3. Quality
As competing firms fight to be the best they try to make their product in any way better than other firm’s product. They will want to increase the quality but not increase the price. The benefit of this will go to the consumers since they will be the ones buying the goods in a low price but with a very good quality.
4. Variety
Firms also try to expand the variety of products being sold. An example of this would be the Apple company they sold a macbook pro, macbook air, ipad 1-4, ipad mini, ipad air, iphone 1-5s, etc. Consumers will then be getting even more advantages since they now have options to choose from.
5. Service
As firms compete, they try to get as many consumers as possible. One way to attract them would be by giving them better services. They will be happier and they’ll consider on buying your product more than they would before.
So in conclusion to my essay, I think that competition between firms is more beneficial to consumers than to firms. Since firms are too busy competing against each other, lowering the prices, giving discounts, rewards, etc that they are giving away abundant goods/services with really low prices along with prizes too. They also improve the quality of the good and increase the services that they give to the consumers. Hence they are actually giving more benefit to the customers than they are to themselves. So to restate my opinion, I do think that competition is more beneficial to consumers rather than to the firms themselves.
Charlene 8B
Reference:
• News 1-10
• Notebook
• http://www.amd.com/us/aboutamd/corporate-information/fair-and-open-competition/benefits/Pages/benefits-of-competition.aspx
• http://www.tutor2u.net/economics/content/topics/competition/competition_importance.htm
• http://www.huffingtonpost.com/jess-cornaggia/increase-competition-amon_b_4077929.html
• http://www.investopedia.com/university/economics/economics6.asp
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Competition is when two or more firms , try to compete to have the best result among the other firms. When competition happen , its either the consumer will got the benefit , or the firm it self that will got the benefit . Usually , when a firms are competing , consumers will be the one that earn benefit . This is because when firms are competing , they are trying to produce the best product ever. So , of course because of his , customer can have better quality of product .
ReplyDeleteSo , the consumer will usually be the one that can get the benefit . This statement is exactly true . First , when a business are competing , then they will produce the best quality of product for the customer . Firms are competing to see whos firm is bigger . usually it will be seen by the number of people that want to buy their product . People that want to buy their product must be choosing the one that have the best quality . So this firms are competing to produce the product that consumer want , that have the best quality . So , customer can get a better quality of product by this . the example will be like Samsung and Apple . Apple is releasing the iPhone 5s , that have the best processor ever . they produce this product , so that customer are interesting to buy it. In other hand , Samsung company is also want to produce the same big processor as Apple . So , this two firms are competing to have a better quality of product .Second , is that the frms can produce a better facility for the consumer . the example will be like in the news 1 . its said that banking competition can help small businesses by increasing access to credit. So in here , the small businesses will be the consumers . by having the bank competition , the small business can more access to credit . So this will be one of the advantages . Third , is that consumer can get more cheaper product . when there are so many competition , each firms will found any ways so that consumer want to buy their product . The example will be like in the news of airplane . Its said that now , customers can just changing what kind of airplane that they like . Also , they can choose which kind of airplane that are cheaper .Fourth is that the consumers can have more variety of products.
But , sometimes firms can be the one who can get more benefit than the consumers .Firms that are competing will also want to have a large benefit . some firms may just reduce the price but some firms also may increase the price because of competition . This higher price will result a higher profit for the firm it self and make a disadvantages for the consumers . The example will be like in the news of hospitals . Its said that Private healthcare groups have been ordered to sell off nine hospitals after an investigation by competition authorities found patients had been overpaying for medical treatment .In this news , it show that consumer got a lot of disadvantages because of competition . But in other side the firms are having a lot of profit . The second is that some customer even can got a bad quality f product . Well , this disadvantage will only happen is some business . Mostly they will provide a better quality of product , But some other firms will just focusing on the number of sales / output . So they don’t care about the quality . Consumers must to pay more for a bad quality . This may produce a lot of profit for the firms.
ReplyDeleteSo the conclusion is that consumers will usually be the one who can get more benefit . This is because without consumers , A firm is equal to nothing . All firms are competing to have a lot of consumers . So they will produce anything in order to gain more consumers. But sometimes when they are trying to produce the product , Some bad result can be produced for the consumers , which is a benefit for the firm it self.
References :
- News 1-10
- Notebook
- http://www.forbes.com/sites/timworstall/2013/09/09/why-samsung-beats-apple-or-perhaps-vice-versa/
- http://antitrust.oxfordjournals.org/content/early/2013/02/04/jaenfo.jns008.full
- Wikipedia
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kezia 8b
Competition can be beneficial for both the company and the consumers but it is mostly more beneficial for the consumers. When there is tough competition between 2 or more companies, then the consumers will gain a lot of benefits. In India large firms such as TATA can easily make smaller firms bankrupt, because the competition between TATA and other big firms are really fierce that it causes bankruptcy.
ReplyDeleteAn advantage of competition for the consumers is that the quality of the product becomes good and good quality products will attract more customers. More competition will encourage the firm to make high quality products to defeat the rival firms in revenue and profit, so the consumers are able to buy innovative and high quality products. An example is the fierce competition between Apple and other companies who produces mobile phones. Another advantage is that the prices of the products will decrease by a lot because of the competition. If a firm wants to defeat a rival firm not only do they need to increase the quality of the product but they also need to reduce their prices to attract customers and get the money. If firms don’t do this then they might suffer from bankruptcy in the future because of lack of revenue. Competition will also create variety. Since a lot of companies are producing similar products consumers can pick from a variety of choices and they can pick whatever suits them best.
Competition can also bring disadvantages to the consumers one of them is that there might be too much choices to choose from which will cause confusion to the consumer. Since many companies are producing similar products it will bring a great variety but it might also cause confusion between the consumers because of lack of production differentiation. Consumers will not be able to pick because of the lack of differentiation in the products, and at the end the consumers won’t be able to buy anything because they can’t differentiate the products and confusion of what to buy and what not to buy. Another disadvantage is that the consumers will be bombarded by a lot of advertisements from companies who are trying to differentiate themselves. To differentiate themselves they need to make a lot of advertisements, and these advertisements can be really annoying for the consumers. On TV there are many advertisements for different products, but if there are too many advertisements then the consumers will be annoyed and might not be interested in the product anymore and the consumer needs to find another product to be interested in and buy.
So in conclusion the consumers can benefit from completion because of the reduction of prices, better products, and a larger variety of products to choose from. The consumers could also get disadvantages from competition and they are too much choices will create confusion and more advertisements will annoy the consumers very much and it might also make the consumer lose his/her interest in the product. But consumers do benefit a lot from competition.
References
http://uk.answers.yahoo.com/question/index?qid=20120430162841AAl030x
http://www.ask.com/question/how-do-consumers-benefit-from-business-competition
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As you may know, competition market is where large numbers of producer compete with each other to satisfy as many consumers’ wants and needs so they could gain more profits, market share, etc. there are two types of competition in the market, which are perfect competition and imperfect competition. A perfect competition describes a market structure where competition is at its greatest possible level. A perfect competition will have many producers and consumers. Therefore it is homogeneous. However, an imperfect competition is a competitive market situation where there are many producers, but they are selling heterogeneous (dissimilar) goods as opposed to the perfect competitive market scenario. There are four types of imperfect market, which are: monopoly, oligopoly, duopoly, and monopsony.
ReplyDeleteA monopoly market is where there is only one producer in the market and therefore customers have no choice but to only purchase from the one and only company. Because of this, monopolistic market will often results in high prices and inferior products. An example would be to say if Comcast was the only cable television provider in your area. Consumers will have no choice but to use Comcast if they want a cable network.
An oligopoly market is when the market or the industry is dominated by small numbers of sellers but few large suppliers. In this type of market, business will often sell similar product or service. An example of an oligopoly market in the USA includes beer, tobacco, accounting and audit services, aircraft, military equipment, motor vehicle, film and music recording industries.
A duopoly market is where two companies of producers own all or nearly all the market for the given output or service. An example is the Boeing and Airbus. They have been called a duopoly for their command of the large passenger airplane market. Another example is Amazon and apple company, they have been called a duopoly for their dominance in the e-book marketplace.
Lastly, a monopsony market is the same thing as monopoly market, except that a large buyer not seller controls a large proportion of the market and drives the prices down. An example is Ernest and Jullio Gallo (the big wine makers) of being a monopsony. They had such power buying grapes from farmers, that sellers had no choice but to agree to their terms.
As for who benefits more, customers, firms and government will each have their own benefits for having competition in the market, it is the question of who benefits more. Before that, let’s discuss each of the following subjects for their benefits in having a competitive market.
ReplyDeleteFor firms, they may gain benefits on productivity and effectiveness; they may try to keep their employees as productive as possible to maximize their profits. Second, they may gain more fame, when a firm is popular because of their quality and service, more customers would like to purchase their product and therefore they may increase in profits and earnings. Third, the companies’ market share may also increase therefore they may have more capitals and more customers.
But in the real world, competition benefits customers and governments more rather than the firm itself, competition can benefit the country too by increasing their market share, therefore, the country can develop to become more stronger and faster in terms of the economy.
Benefits for the customers also include cost, because there are many companies selling similar type of product, firms may compete against each other to lower their price cost and therefore, customers can obtain their products with cheaper cost. Companies may also have better quality when competing against each other. This is because they want to be the best at providing service, quality, and product, so they will try their best to increase their quality to attract more customers. Also, businesses will have better innovations, this means that company will invent new products and services to the people so customers will have more access to newer products and advanced goods, such example is the apple company, they keep on creating new processors and features (example is the new fingerprint feature), that is something new that the customers could enjoy and can feel more satisfied in their safety of their mobile phone.
To finish my essay, in conclusion, all parts of competition, the customers, government, and firm will have their own benefits, but in my opinion, customers will have the most benefit because firms are so busy trying to be the best from all of their competitors, they will practically do anything to be on top, and because of that, customers will have better quality, cheaper cost, better service and etc.
Reference:
http://www.amd.com/us/aboutamd/corporate-information/fair-and-open-competition/benefits/Pages/benefits-of-competition.aspx
http://www.investopedia.com/terms/m/monopsony.asp
http://answers.yahoo.com/question/index?qid=20080204052736AAMePf5
http://economictimes.indiatimes.com/definition/imperfect-competition
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Competition is the situation where we are trying to do better than another else, in competition we have competitor, and competitor is someone who is trying to win or do better than all others especially in business. Sometimes, competition can be beneficial for the company and sometimes it can be disadvantage for the firm, although it is disadvantage for the company, sometimes it also can be beneficial for the consumers.
ReplyDeleteSome advantages for the business are, they will got a cheaper price of goods from the supplier because the supplier also competing to get these firm that buy in great amount, they also will upgrade in technology where they will have the best technology at the time, they also can get adapted to the global wants about the products what the model or the specifications of the product is. The example is the producer of one of the famous smartphone, Samsung, they can get all of the advantage that has been mentioned because they have the competitors of the smartphone, so they also will try to get the cheapest supplier, best technology and the other else. But from the satisfied customer, they will be advantage because they know that they are good in producing the products, so when they release the new product, the customers will buy their new product, so their sales will increase every release of the new product.
Some advantages for the customers are they will got a cheaper price for the products because if the company sell the products with a high price, the consumer will buy the other brand, also the quality of the product also will increase because they will serve you the best or else you will buy the products from their competitor, the firms that will adapt to the global wants also makes people like the product that they buy, so the customer will be satisfied of the new release of the products. They also will got the best service of the product because if the firms can’t compete from the products that they sell, they will give the best service from the firms. The example is the Smartfren smartphone, they give the cheap price for the Smartfren’s buyers. It will make them sell their products in great amount and the quality is good enough. They give the good service to the consumer like the free call to the same operator (Smartfren), Also the other example is the Samsung buyers where they were satisfied from the newest phone that have been sold to the market (Samsung Galaxy Note 3). The buyers are satisfied of the products because of the good specifications.
So, as the conclusion, both the firms and the consumers get the benefit from the competition. The firms can get the great amount of the sales and the new technology because of the competition also the buyers also get benefit from the competition where they were satisfied of the product released and the cheaper price of the product they will get.
Reference : www.cci.gov.in/May2011/.../Dshruti.pdf
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Competition is the rivalry between firms in a market where firms strive to be the best in the market so that they can generate more profits and become well known. There are two main types of competition which are perfect and imperfect competition. The perfect competition arises when there is a lot of suppliers that supplies various kinds of products to a lot of customers who are willing to buy the product. The number of suppliers is equal to the number of buyer. Due to this, the price of the product is uncontrollable by the buyer nor the supplier. In an imperfect competition, the number of suppliers is not equal to the number of buyers. In an imperfect competition, the supplier is usually one, two or some but not equal to the number of buyers. In this type of competition, the price can be controlled by the supplier because there is only some supplier available to the buyers. Imperfect competition can be divided into 3 types which are : monopoly, duopoly, oligopoly. A monopoly arises when the market has only one supplier. Example : Apple. This is because Apple is the one who sells a product where other firms don’t sell. While duopoly has 2 suppliers only. Example: Intel and Amd . While there are a lot of competitors in microprocessors manufacturing now, back then the ones who manufactures microprocessors are Intel and AMD only. Oligopoly competition has more than 2 competition but they have the overall control over the market. Example : AT&T Mobility, Verizon Wireless, T-Mobile, Sprint Nextel. They control wireless provider market in the US. It is said that there is more benefit for the consumer rather than the firm in a competition. Here are the comparisons.
ReplyDeleteFor the firm :
1.Motivation
When there is a competition between firms, firms tends to do their best , they are motivated to be the best so that they can be the best and take overall control over the market. Because of this motivation, firms will work hard and find ways to generate more profit.
2. Popularity
Firms want to be popular. They want to be popular because it can attract new customers to buy their product. To be the best in the competition can increase their popularity and in the end can also increase their profit.
For the consumers:
1.More Choices
As there are a lot of firms that compete, firms will tend to be more innovative so that they can attract more customers because they have more choices or they have a better quality of product than the other firms.
2.Cost
Consumers are very attracted to low prices but they gain a high quality product. Firms tries to keep their prices as low as possible but keeping their product quality so that they can attract more customers even if they are making loses. Due to this , consumers can get a very low price.
3. Services received
If a customer buys a product and liked the product but don’t get the sufficient service given by the firm , people will find the firm unattractive and they don’t want to go there anymore. Firms will develop new ways to make the customer pleased of the firm services and the product. Some people may go back to the firm again.
Although there are still a lot of benefits that are unmentioned can both firms and customers receive from a competition , in the end there are still a lot more benefits received by the customer rather than the firm from a competition.
References :
Economics book
www.huffingtonpost.com/jess-cornagwwwgia/increase-competition-amon_b_4077929.html
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Competition is a process when a firm compete each other to have increased in sales , maximised profit and to better their enhance image. Why do a firm compete? What for ? Firms will therefore compete for a market for a number of reasons.
ReplyDelete1. To increase their customer base: firms will compete with each other in the same market on prices, product quality and through promotional strategies to increase the number of people / other firms that buy their products. If there is more customers , it should mean that more revenue and, if the costs of increased competition do not rise as fast, it will also boost profits.
2. To increase sales: some firms compete each other to increases the number of sales / total sales. Firms will not only aim to increase the number of consumer buying their products , but will also hope that they would also increase their sales. Cutting prices can increases sales revenues from products for which demand is price elastic.
3. To expand market share: some firms compete each other for some reasons. The market share of a firm is calculated as its proportion of the total market volume or values of sales.
4. To achieve product superiority: this has two meanings. On one hand it refers to making a product that is clearly better that their rival products for reasons of prestige and profits. For example : Apple iPhone 5S is the first 64-bit processor mobile phone with many features that are not available in every mobile phone, even samsung . Products superiority means the product dominates a market.
5. To enhance image : a firm sometimes , after they become popular, many peoples will know that it has a good brand image .
6. To maximise profit: ultimately the achievement of all the above objectives of competition should help to increase the total profits of a firm that is sucessful.
There are two types of competition :
1. Price Competition = it involves competing to offer consumers the lowest or best possible prices for rival products.
2. Non-price competition = it involves competing on all other product features other than prices.
Competition is not always benefit always for consumers, firms, government. But in some cases, competition more benefits consumers because the consumers is the one who buy the products from the firm who compete. And for the firms, it is also benefited because they also get increase in sales and they are able to maximise their profits.
So, in conclusion, competition is a process when a firm compete each other to have increased in sales , maximised profit and to better their enhance image.Competition is not always benefit always for consumers, firms, government. But in some cases, competition more benefits consumers because the consumers is the one who buy the products from the firm who compete. And for the firms, it is also benefited because they also get increase in sales and they are able to maximise their profits.
References : Economics Textbook
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-Leonardo 8B
Sorry sir Bipin for the late submission