Is competition good

for business?
ALNA SIROVA RTA 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

http://ladydinahs.com/

Competition forces to
improve customer
service

http://www.glasbergen.com/wp-content/gallery/service/service21.gif

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/directcompetition.html (Accessed: 29 October 2014)
indirect competition. businessdictionary.com http://www.businessdictionary.com/definition/indirectcompetition.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)