is competition good

Is competition good

for business?

ALĪNA SIROVA ∙ RŪTA VIGULE

Competition

Positive aspects

Negative aspects

Conclusions

Competition

The act of competing, as for

profit or a prize

Competition (economics)

Rivalry between several businesses striving

for the same customer or market in which

every seller tries to get what other sellers

are seeking at the same time

Direct competition Market situation where two

or more firms offer essentially

the same good or service‏

Indirect competition

Competition among the suppliers

of different types of products that

satisfy the same needs.

Perfect competition

1) All firms sell an identical product

2) All firms are price takers

3) All firms have a small market share

4) Buyers have complete information about the product

being sold and the prices charged

5) Freedom of entry and exit

Real life

Real examples

POSITIVE ASPECTS

Competition leads to

innovation and

improvement

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Competition forces to

improve customer

service

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Competition makes

you focus on your

target audience

Competition makes you evaluate

your strengths and weaknesses

Learning from your

competitors

NEGATIVE ASPECTS

Competition draws away

your potential and existing

customers

Anchoring

Use of irrelevant information as a

reference for evaluating or estimating

some unknown value or information

Monopoly

A situation in which a single company

or group owns all or nearly all of the

market for a given type of product or

service

Oligopoly

A situation in which a particular

market is controlled by a

small group of firms

Cartel & Collusion

Cartel - an agreement of cooperation formed

between competitors in a specific industry

Collusion - secretive agreement between two

or more organizations, formed with the aim of

gaining illegal mutual benefits

Conclusions

Competition is good for business

Competition is bad for business

"Competition brings out the

best in products

and the worst in people."

- David Sarnoff (1891-1971)

References “direct competition.” businessdictionary.com http://www.businessdictionary.com/definition/direct-competition.html (Accessed: 29 October 2014)

“indirect competition.” businessdictionary.com http://www.businessdictionary.com/definition/indirect-competition.html (Accessed: 29 October 2014)

Differencebetween.com Difference Between Cartel and Collusion [Online] Available form: http://www.differencebetween.com/difference-between-cartel-and-vs-collusion/ (Accessed: 29 October 2014)

“monopoly.” investopedia.com http://www.investopedia.com/terms/m/monopoly.asp (Accessed: 29 October 2014)

“oligopoly.” investopedia.com http://www.investopedia.com/terms/o/oligopoly.asp (Accessed: 29 October 2014)

“perfect competition.” investopedia.com http://www.investopedia.com/terms/p/perfectcompetition.asp (Accessed: 29 October 2014)

“competition.” thefreedictionary.com http://www.thefreedictionary.com/competition (Accessed: 29 October 2014)

Worldofquotes.com David Sarnoff Quotes [Online] http://www.worldofquotes.com/author/David+Sarnoff/1/index.html (Accessed: 29 October 2014)