Generally, you want your strategy to move your business away from perfect competition so you stand out from the competition and have more power and control. No farm could easily raise their price for this standard ingredient. For example, you might buy flour for baking without knowing or caring which farm it came from. You just have to accept the going rate, because customers can easily switch to a competitor if your prices rise by even one cent above others. In perfect competition, your business has little power and can’t set prices. It’s easy for businesses to start up or shut down, with few barriers. It doesn’t really exist in practice but it’s helpful to understand.Ī market has perfect competition if there are lots of businesses offering standard products or services, and customers have plenty of information to compare them. Perfect competition’s an idea worth understandingĮxperts talk about the idea of perfect competition. Read about these market types and then use the strategy planning worksheet to write notes about your market. Your market is probably somewhere in between. At the other extreme, there’s just one business, a monopoly. At one extreme, known as perfect competition, there are countless businesses offering similar products or services. Markets can be made up of any number of businesses. A market's structure is just a way to explain competition, looking at how many businesses there are and how they interact with each other.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |