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I. Introduction.II. Development. 2.1. Concept of competition 2.2. Reasons for competition 2.3. How do companies and consumers benefit from the competition 2.3.1. Benefits for companies from the competition. 2.3.2. Benefits for consumers from the competition. III. Conclusion.
P a g e | 1 Group 5. Topic: How do companies and consumers benefit from the competition? I. Introduction. At times, we may wish that competition didn’t exist so we could have total control of the market, but we should see competition as a good thing and more importantly, as a vital aspect to economic growth. Competition is necessary and it benefits both the business and the consumer in a variety of ways. Competition in the world of business is commonly viewed in a negative light, but doesn't have to be a case. Competition can be a good thing for you, your competitor and particularly your customer. Competition may seem threatening at times, but the fact is that it comes with numerous benefits. This article discusses some of the benefits that competition can offer to companies and consumer. II. Development. 2.1. Concept of competition. Competition is a natural phenomenon, is the conflict between individuals who share the same habitat since they are attending to a certain object. In economic activity, competition is a rivalry between economic agents (producers, consumers) to win the better position in producing, contributing and consuming goods to obtain the best interests. Competition can occur between producers and consumers (the producers want to sell expensive, consumers want to buy cheap); between consumers together to buy goods cheaper, better, between those who produce made to have P a g e | 2 better conditions in the production and consumption. There are many measures to avoid: competitive price (discounts .) or non-price (advertising .). 2.2. Reasons for competition Increasing the capacity of enterprises in terms of finance, technology, human resources, management. Financial Strategy is one of the strategies the most important functions to perform overall competitive strategy of the business. Technology is a key competitive tool. Technological innovation is a requirement, technology strategically help determine the difference in terms of product quality, brand and price. There is a team of highly skilled labor, talent. Improving labor productivity and employee creativity. Enhancing the competitiveness of the enterprise products with competitors First, many companies design products generate more added value to the enterprise due to capture changing trends of market demand. The second is the application of appropriate technology, ensuring the creation of quality products to meet the needs of the market, has low production costs, low product cost should be competitive with competitors in the market. Expanding market for enterprise products The enterprises to capture consumer preferences of customers to produce competitive products in terms of design, and quality and price . to be able to maximize market share for their products on the system agents, joint venture, opening branches and representative offices in areas where demand. 2.3. How do companies and consumers benefit from the competition? 2.3.1. Benefits for companies from the competition. P a g e | 3 Competition is an inevitable trend in the market economy. Competition is the motivation for companies. Competition makes firms focus on investment in science and technology, constantly improve technology, application of science and advanced technology in production in order to increase quality and reduce cost. In addition, it is necessary to encourage, establish and maintain a creative business environment with the inventions and innovations to create competitive advantage for the company. Increasing the capacity of enterprises in terms of finance, technology, human resources, management. Financial strategy is one of the most important functional strategies to implement a comprehensive competitive strategy of business. Technology is a key competitive tool. Technological innovation is a strategic requirement. Technology helps determine the difference of products in terms of quality, brand and price. There is a team of high skilled labor and talents to improve productivity. Improving the competitiveness of the enterprise’s products comparing with competitors. The first is that enterprises can design products that generate more added values due to capturing the needs of market. The second is the application of appropriate technology. It not only ensures to produce the high quality goods and services but also decrease cost. This help the enterprise’s products have a lower price but keep competitiveness on market. Expanding market P a g e | 4 The enterprises capture the tastes of consumers to manufacture the high competitiveness products in terms of design, quality and price in order that the enterprises can maximize market share for their products on the agents system, joint venture, opening new branches and representatives 2.3.2. Benefits for consumers from the competition. Competition is the precondition of free-enterprise system since the more businesses are competing with each other, the more products or services with higher quality will be provided consumers. In other words, competition gives the consumers the best values for their money. When the competitors enter the market from all sides, consumers will get more benefits from that competition because the competitors will put pressure on price, quality, design, technologies. It helps consumers more opportunities in choosing products or services. The benefits consumers are enjoyed include: Lower Prices One common company’s method use is to offer lower prices than the competition, which benefits the consumer. Lower prices may come in the form of special sales promotions, such as coupons or discounts, or the implementation of a pricing strategy where lower prices are an everyday occurrence. Better quality Competition also encourages businesses to improve the quality of goods and services they sell – to attract more customers and expand market share. Prices for a product can be the same or sometimes even higher than the price offered by a competing company, provided that the item is so good that customers will really want it. Businesses can offer a better quality product to get customers to choose them. P a g e | 5 Better after sales service A competitive economic system benefits the consumer in better quality of service. Companies that may not be able to beat their competitors on price can instead focus on delivering superior customer service to attract and retain customers. Consumers often shun even a quality product because of poor after- sales support. For the company, strong customer service can lead to customer loyalty. The consumer benefits by being "taken care of" by the company. Consumer Information Heightened competition means more information that is accessible to consumers to help them make informed decisions. In the age of the Internet, consumers may log on to the websites of several competing companies to gather information that a 30-second television commercial cannot convey. By making comparisons, the consumer can feel more confident in his ultimate buying decision. Wider choice In a competitive market, businesses will try to make their products different from their competitor. This results in greater choice – so consumers can select the product that offers the right balance between price and quality. A competitive market means that there will be many suppliers for similar products. As there are more and more suppliers in the market, the customers will have much more choices. When monopolistic competition exists in the market, consumers usually have a few choices, so they have to be bound about product, even if its quality is appropriate with its price. Electricity market in Vietnam is a typical example for monopoly. In order to bring to customers best benefit, a competitive market with many competitors is necessary because it helps customers have much more choices for their demand, not be depended on unique suppliers. P a g e | 6 III. Conclusion. Competition has an important role in the production of particular goods, and in the economic field in general, is the driving force for production development, contributing to economic development. Competition forced the producers to be active, responsive, better capture consumer demand, improve skills actively, constantly improving technical progress applies, the successful research latest in production and perfect way of organizing production, the production management to improve productivity, quality and economic efficiency. Where lack of competition or show signs of stagnation is often proprietary and less developed. Competition brings lots of benefits, especially the benefits for consumers. The manufacturers must find out the ways to make higher quality and more eye- catching products with lower cost and higher technology to meet the tastes of consumers. . P a g e | 1 Group 5. Topic: How do companies and consumers benefit from the competition? I benefits that competition can offer to companies and consumer. II. Development. 2 .1. Concept of competition. Competition is a natural phenomenon, is the conflict