Employment and Unemployment

INTRODUCTION TO HRM AND HRD
INDIVIDUAL APPROACH BEST EDUCATION

By G.S.Behl (9810332316)
Competition
Competition is a situation where two or more individuals or groups strive to gain a
desired outcome that is limited or scarce. It can be in various forms such as
economic, social, or athletic, and it is typically driven by the pursuit of rewards or
recognition.
In economic terms, competition refers to the rivalry among businesses or

individuals for market share, customers, or profits. It is essential for promoting
innovation, reducing prices, and increasing the quality of products and services.
In social and cultural settings, competition can take the form of contests, games,
or tournaments, where individuals or teams compete for a prize or recognition.
This type of competition can help develop skills, foster teamwork, and provide a
sense of achievement.
Overall, competition can have both positive and negative effects, and it is a
ubiquitous aspect of human society.
Competitive environment
How does a competitive environment affect businesses?
Your competitors can directly affect your business and the decisions you make.
Let's imagine two online clothing stores that pose a threat to each other in terms
of business development and profit. One of them decides to conduct a flash
sale before Christmas and provide their customers with 40% off sitewide. The
other store will also need to come up with a great offer to attract leads and
customers, raise sales, sell unpopular products and, as a result, gain revenue.
By G.S.Behl (9810332316)
Similarly, if one coffee company brings out a new product to the market, their
competitor will need to consider growth hacking. Thus, competition can be
beneficial as it motivates companies to get better and improve their products.
A competitive environment also has a positive effect on customers. Businesses

often offer high-quality goods at an affordable price to win the attention of
consumers. Besides, companies have to bring out their products through
innovations. However, competition can sometimes complicate the existence of a
business. Let's take two companies within one location, for example. If one of
them sets low prices and discounts, it will be difficult for the second company to
compete.
Now that you know how a competitive environment influences your business and
customers, it's time to proceed to the types of competition that define the
relations between and among sellers and customers.
Types of Competitive Environment

It's essential to understand what types of competitive environments there are to assess the
economic environment in business. You should know how companies and markets function so
that you can analyze industry and market news, policy changes, and legislation in the future.
Let's distinguish the main types of competitive environments and review each of them in detail.
 Pure competition. In a perfectly competitive environment, many small

companies produce similar products, and many consumers buy them.
These manufacturers are small, and thus they can't influence the price,
defined by supply and product demand. For example, when a farmer brings
dairy products to the local market, this person can't change the market
price and agrees with the going one.
 Monopolistic competition. In this environment, many manufacturers
produce different products, although they might serve the same purpose.
By G.S.Behl (9810332316)
 Customers can distinguish the products because of the differences in
quality, features, etc. Businesses actively use advertising to promote their
products and convince consumers that they are not like other products and
have better quality. Companies in monopolistic competition are price
makers, which means that they can influence the product price. However,
to justify the price increase of their products, they should offer something
exclusive to be unlike other businesses, for example, improve the quality of
their goods.
 Oligopoly. In this market model, there's a small number of businesses,
usually two or more. It's considered stable as companies don't compete but
collude to obtain high market returns. Firms set and keep prices high
together or under the leadership of one particular company. In
an oligopoly, profit margins are higher than in a more competitive
environment. However, the main problem of this market structure is that
businesses often face a prisoner's dilemma, an incentive to cheat and act in
their interests at the expense of other companies.
 Monopoly. There's one company that produces a unique product. This
manufacturer doesn't face any competition, and the product doesn't have
any substitutes. Also, a monopolist decides on the product's price and sets
barriers for new companies to enter the market.
Perfect competition, monopolistic competition, oligopoly, and monopoly are the
four main market structures you should be aware of when entering the market.
Now it's time to move to the competitive environment analysis.
Competitive Environment Analysis

By G.S.Behl (9810332316)
To develop a great marketing strategy, you need to understand your competitors
and their tactics. At this point, you need a competitive analysis framework to
reach your business opponents. Let's discuss several most popular frameworks.
 SWOT Analysis. You can assess the external and internal factors that
influence your company. This framework helps you identify competitive
advantages, compare your opponents' strong and weak sides on different
marketing channels, and define your further marketing steps.
 Strategic Group Analysis. This framework characterizes the strategies of all
strong competitors in various strategic dimensions. It allows you to identify
your competitors' positions in the competitive environment and the factors
that bring your business a profit. It also enables you to identify the key
aspects of success and assess your position among competitors.
 Porter's Five Forces. The basis of this framework lies in exploring the
competitive market forces in the industry and helping define the industry's
strengths and weaknesses. It involves five elements: new entrants, buyers,
suppliers, substitutes, and competitive rivalry. These five influence the level
of competition in your industry.
 Growth-Share Matrix. By using this framework, you can decide which
products are worth investing in according to their competitiveness and
attractiveness within the market. It's particularly useful for large companies
since it helps them define their product portfolios and decide which
products are worth continuing to invest in and which are no longer worth
it.
 Perceptual Mapping. This framework allows you to see the position of your
product against the alternatives of your competitors. It enables you to
understand how your customers perceive your product compared to
competitors' and whether your positioning strategy matches your target
audience. It can also help you find the gaps you need to resolve.
By G.S.Behl (9810332316)
To fully understand different market structures, let's walk you through some
examples.
Examples of Competitive Environment

Every business plan of even a small firm contains a section about competitive
environment analysis. As you already know from the information above, it
includes all the external factors that influence your business and the product or
service you offer.
Let's take electronics, for example. Samsung is a company founded in South Korea
that specializes in electronic and smart appliance technology. Their competitors
include Apple, Sony, Huawei, Intel, and many more, which is why Samsung's team
tries to create a product that is better than competitors' alternatives using
innovations that can attract prospects.
Changes in technology or the way customers buy products can influence the types
of competitive environments. For example, Amazon changed products'
distribution and customer expectations. Introduced innovations influenced the
number of consumer goods companies and opened markets for small firms that
previously had no opportunity to compete with more prominent companies.
Your business can find itself in different types of competitive environments. That's
why it's critical to understand the difference between them and be ready to
assess industry and market news, policy changes, and legislation.
By G.S.Behl (9810332316)

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INTRODUCTION TO HRM AND HRD

INDIVIDUAL APPROACH BEST EDUCATION

In economic terms, competition refers to the rivalry among businesses or

A competitive environment also has a positive effect on customers. Businesses

Types of Competitive Environment

 Pure competition. In a perfectly competitive environment, many small

Competitive Environment Analysis

Examples of Competitive Environment

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