Transcript Marketing_Competitiveness

Marketing &
Competitiveness
Market structure
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Monopoly
Oligopoly
Monopolistic competition
Perfect competition
Monopoly
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In theory, a single producer in a market, but
in practice a firm with a market share of 25%
or more
Potential danger of consumer exploitation
Businesses of more than 25% market share
continue due to high barriers to entry:
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High start-up capital costs
Patents
Brand loyalty
Oligopoly
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A market dominated by a small number of
large businesses
Extremely competitive
Rivalry usually takes the form of non-price
competition
Cartel = a group of firms that come together
to agree price & output levels in an industry
(illegal)
Monopolistic competition
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Where a large number of firms are competing
in a market, each having enough product
differentiation to achieve a degree of
monopoly power & therefore some control
over the price they charge
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Development of brand name
Reputation
Set-up costs relatively low
Perfect competition
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Where there is a large number of sellers &
buyers, all of which are too small to influence
the price of the product
Sellers produce homogeneous products
All firms are price-takers
Perfect freedom of entry into & exit from the
market
Porter’s Five Competitive
Forces
Threat of entry to the
industry by new competitors
Power of suppliers
Intensity of competitive
rivalry
Threat from substitute
products or services
Power of buyers
Porter’s 5 Forces
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Assess firm’s strategy
Look for clear competitive advantage
Advantages of competition
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Improve efficiency
Improve cost-effectiveness
Improve the quality of products & services
Reduce waste by attempting to become more
efficient
Disadvantages of competition
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If based on price, product quality might be
sacrificed
Huge resources are devoted to competing
with other firms
Some businesses will inevitably be forced out
of the market, with the human consequences
of redundancy & unemployment
Takeovers & mergers  increasing
concentration
Impact of market conditions
on the marketing mix
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Monopoly
Oligopoly
Monopolistic competition
Perfect competition
Competitiveness
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The ability of businesses to sell their products
successfully in the market in which they are
based
Determinants of
competitiveness
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Investment in new equipment
Staff skills, education & training
Innovation through investment in research &
development
Enterprise
Effectiveness of the marketing mix
Incentive schemes for staff
Improvements to operational procedures
Quality procedures
Financial planning & control
Methods of improving
competitiveness
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Marketing
Reducing costs
Improving quality
Staff training