46. Impact of Competitive and Market Structure

46. Impact of Competitive and Market Structure

1. Competitiveness measures the firms ability to compete i.e. compares its consumer offer to the offers made by its rivals

2. What is a Competitive Market?

   • Intense rivalry between producers of similar goods/ products
   • Increased number of firms = Increased competition
   • Firms try to create a USP or use predatory pricing
   • Prices and profit margins are squeezed

3. The Degree of Competition within a Market

   • One Dominant business
     • 'Monopoly'
     • Single supplier and no competition
     • Bad for Customers: restrict choice, drive prices upwards.
     • Competition Commission - ' Monopoly is a firm that has a market share of 25%+'
     • Markets dominated by a large business, firms do not need to spend heavily on promotion (consumers are captive)