Businesses has continuously feel threaten by the activities of their competitors. Competition may be in form of activities of rivals who produce/provide similar goods and services. Or it can be due to activities of businesses that produce substitutional goods and services. Competition can constrain the achievements of business so also it can bring out the best of it’s performance. The presence of competition in the market place can also indicates that:
✓No business can make decision without reference to its competitive environment.
✓Even a monopoly must be concerned about potential entrants or effective substitutes.
✓Pricing must account for what the market will bear and the reaction of competitors.
✓The more competitors there are and the closer their product offering, the more sensitively will sales respond to a relative change in price.
✓Price wars may erupt from time to time but non-price competition using branding, other products and promotional tactics.
Shaksg Business Blog 