Types of Competition
What is Perfect Competition?
A large number of small companies, none with the opportunity for market control
Government legislated control
EXAMPLES: Agriculture Markets, Fruits, Vegetables, Wheat
Which company is a direct competitor of Coca Cola?
pepsi
What does it mean for a competitive advantage to be sustainable?
A permanent advantage over your competition
What does it mean for a competitive advantage to be non-sustainable?
Temporary competitive advantages that can be easily used by competitors to gain market share
How can Convenience be a competitive advantage.
making the activity as comfortable and easy as possible for the consumer.
What is monopolistic competition?
A large number of companies, each with an opportunity for a degree of market control
EXAMPLES: Restaurants, Clothing, Automobiles
answer varies
What is a USP?
The feature or benefit of a product or service that cannot be easily duplicated
Patented technology (Blackberry or IPhone)
Example: Roll up the Rim (Tim Hortons)
Example: Dollar Drink Days (McDonalds)
How can degree/quality of service be a competitive advantage?
Gym that has a weight room vs. Gym that has a weight room, swimming pool, squash courts, and massages
No Frills vs. Superstore
Which type of competition is "A small number of large companies, each with a substantial amount of market control"
OLIGOPOLY
Define direct competition?
When companies with products that are very similar are competing for the same market
What is an example of lowering production costs?
Using cost-efficient, high technology processes to reduce costs and then charge a lower price.
ie. Honda Plant
How can placement and location be competitive advantages?
Product is there where consumers want it and when they want it.
How is selection a competitive advantage?
Video store that only rents Canadian films vs. Video stores that offers thousands of different types of movies
Which type of competition has complete market control?
Monopoly
define indirect competition?
When companies with products that are NOT similar are in competition for consumer’s income
What does it mean to service a niche market?
One company provides a product or service for a small market and, by doing so, keeps competitors out of the market
Example: August, PUSH, Pup Socks
How can Quality be a competitive advantage?
Being the best of its type
Stronger, faster, easier, lighter, etc.
Adding features to improve a product
How can reputation be a competitive advantage?
People always tell others when they receive bad service (word of mouth)
Define Free Market Society.
A free-market society allows individuals to hold private property--you may purchase things, keep them, sell them… you can use your property to create personal profit.
What are the benefits of competition?
Encourages new business creation
More jobs and therefore salaries for people
Wide selection of goods and services for consumers (choices)
Product type, style, price and quality
Forces businesses to produce better quality products and offer reasonable prices
Consumer does not consider another brand or store unless the favored product/retailer makes a big mistake
Example: Your favourite barber/ Hair Stylist
Name the 7 non-sustainable competitive advantages.
promotion, placement/location, quality, benefits of use, technology, price and design features.
Name all 5 non-sustainable competitive advantages for services.
Reputation, price, convenience, quality of service/degree, selection