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Business Fundamentals was developed by the Global Text Project, which is working to create open-content electronictextbooks that are freely available on the website http://globaltext.terry.uga.edu. Distribution is also possible viapaper, CD, DVD, and via this collaboration, through Connexions. The goal is to make textbooks available to the manywho cannot afford them. For more information on getting involved with the Global Text Project or Connexions email us atdrexel@uga.edu and dcwill@cnx.org.

Editor: James W Bronson (The University of Wisconsin, USA)

Contributors: Kellie Goldfien, Ryan Wolford

Reviewer: William A Drago, (University of Wisconsin, USA)

Competing firms offer functionally interchangeable products to the same buyers. Competition occurs when competing firms attempt to attract buyers by offering products with greater perceived benefit. Common benefits include price, service, reputation, and image, but may include virtually anything else associated with a product that the buyer values. A buyer’s perceptions of what constitutes a benefit may vary widely based on the nature of the product. Since the actions taken by one competitor to attract buyers are likely to affect the performance of other competitors, competing firms are said to be interdependent .

Coke and Pepsi are interdependent. An attempt by Pepsi to attract buyers (increase sales) through an advertising campaign will decrease the sales of Coke. Coke may counter this advertising campaign with its own advertising or it may elect to take another competitive action such as a temporary reduction in the price of Coke. How Coke chooses to react to Pepsi will be based on an analysis of how the firms have acted in past situations. The industry’s competitive dynamics is the ongoing series of competitive actions and competitive responses that take place as Coke and Pepsi compete for customers.

Competitive intelligence is the systematic collection and analysis of publicly available information about competitors. Intelligence about competitors is key to understanding the actions they are currently taking to attract buyers. Competitive intelligence may also allow the firm to predict a competitor’s future actions and take measures to preempt or minimize the impact of those actions. The objective of a firm’s competitive intelligence is to understand its competitors.

It should be easy to envisage Coke and Pepsi as interdependent competing firms. Can you come up with five more examples of interdependent competing firms, e.g. Honda and Toyota, Boeing and Airbus,...

Got questions? Get instant answers now!

Why you have competitors (or how buyers have managed to survive without your product and why you need buyers more than buyers need you)

Entrepreneurs commonly underestimate the impact of competition. Entrepreneurs who do underestimate the impact of competition are failing to consider the fact that potential buyers are currently managing without the entrepreneur’s product. There are three arguments for why potential buyers are managing without the entrepreneur’s product or service:

Questions & Answers

what is math number
Tric Reply
x-2y+3z=-3 2x-y+z=7 -x+3y-z=6
Sidiki Reply
Need help solving this problem (2/7)^-2
Simone Reply
what is the coefficient of -4×
Mehri Reply
the operation * is x * y =x + y/ 1+(x × y) show if the operation is commutative if x × y is not equal to -1
Alfred Reply
An investment account was opened with an initial deposit of $9,600 and earns 7.4% interest, compounded continuously. How much will the account be worth after 15 years?
Kala Reply
lim x to infinity e^1-e^-1/log(1+x)
given eccentricity and a point find the equiation
Moses Reply
12, 17, 22.... 25th term
Alexandra Reply
12, 17, 22.... 25th term
College algebra is really hard?
Shirleen Reply
Absolutely, for me. My problems with math started in First grade...involving a nun Sister Anastasia, bad vision, talking & getting expelled from Catholic school. When it comes to math I just can't focus and all I can hear is our family silverware banging and clanging on the pink Formica table.
I'm 13 and I understand it great
I am 1 year old but I can do it! 1+1=2 proof very hard for me though.
Not really they are just easy concepts which can be understood if you have great basics. I am 14 I understood them easily.
find the 15th term of the geometric sequince whose first is 18 and last term of 387
Jerwin Reply
I know this work
The given of f(x=x-2. then what is the value of this f(3) 5f(x+1)
virgelyn Reply
hmm well what is the answer
If f(x) = x-2 then, f(3) when 5f(x+1) 5((3-2)+1) 5(1+1) 5(2) 10
how do they get the third part x = (32)5/4
kinnecy Reply
make 5/4 into a mixed number, make that a decimal, and then multiply 32 by the decimal 5/4 turns out to be
can someone help me with some logarithmic and exponential equations.
Jeffrey Reply
sure. what is your question?
okay, so you have 6 raised to the power of 2. what is that part of your answer
I don't understand what the A with approx sign and the boxed x mean
it think it's written 20/(X-6)^2 so it's 20 divided by X-6 squared
I'm not sure why it wrote it the other way
I got X =-6
ok. so take the square root of both sides, now you have plus or minus the square root of 20= x-6
oops. ignore that.
so you not have an equal sign anywhere in the original equation?
is it a question of log
I rally confuse this number And equations too I need exactly help
But this is not salma it's Faiza live in lousvile Ky I garbage this so I am going collage with JCTC that the of the collage thank you my friends
Commplementary angles
Idrissa Reply
im all ears I need to learn
right! what he said ⤴⤴⤴
greetings from Iran
salut. from Algeria
A soccer field is a rectangle 130 meters wide and 110 meters long. The coach asks players to run from one corner to the other corner diagonally across. What is that distance, to the nearest tenths place.
Kimberly Reply
Jeannette has $5 and $10 bills in her wallet. The number of fives is three more than six times the number of tens. Let t represent the number of tens. Write an expression for the number of fives.
August Reply
What is the expressiin for seven less than four times the number of nickels
Leonardo Reply
How do i figure this problem out.
how do you translate this in Algebraic Expressions
linda Reply
why surface tension is zero at critical temperature
I think if critical temperature denote high temperature then a liquid stats boils that time the water stats to evaporate so some moles of h2o to up and due to high temp the bonding break they have low density so it can be a reason
Need to simplify the expresin. 3/7 (x+y)-1/7 (x-1)=
Crystal Reply
. After 3 months on a diet, Lisa had lost 12% of her original weight. She lost 21 pounds. What was Lisa's original weight?
Chris Reply
what does it mean business eco system?
Mohammed Reply
what is business
Abdul Reply
how can i know my business best resources, cheap and good quality
cabdi Reply
vikash rawat
jagvir Reply
entrepreneurial mobility
Manish Reply

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Source:  OpenStax, Business fundamentals. OpenStax CNX. Oct 08, 2010 Download for free at http://cnx.org/content/col11227/1.4
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