Competition Is the Act of Trying to Win One Another - Essay Example

…………………………………………………………………………….xxxxx ……………………………………………………………………..xxxxxx …………………………………………………………………………..xxxxx ……………………………………………………………………………..xxxxx @2014 Competition is the act or the condition of competing while competitiveness is the aggressive willingness to compete amongst one another. This means that competition is the act of trying to win one another while competitiveness is the feeling that one wants to compete with the other. There is a confusion between the competition policy and the competitiveness policy in the UK in that the country creates some restrictive business competition policies without any understanding of the market competition. For example, the cartels are allowed to merge in order to attain monopoly powers. The competitiveness policy encourages on benchmarking whereby an entrepreneur visits another competitive entrepreneur and finds out on what he/she does in order to attain his/her success (Bristow 2010). In competition, every business is always straining to win the other by getting most of the customers on its side and not by merging and obtaining monopoly to exploit on the market. This is because if an entrepreneur exhibits monopoly power, he or she may exploit the market when there is no government interference. Marxian views on competition Marxian views competition as the act of competing for land, capital and workers alongside competing with other business and firms for profit making (Tan 2014). This means that a business unit must compete for the workers and it should provide reasonable pay for workers. Through this, they can be able to attract workers from other business units and this makes them have adequate labor. They should give their workers allowances and other benefits to encourage and motivate them. The business unit should not overwork the workers but instead they should give them a reasonable pay. Secondly, the business unit should also effectively compete for land as a factor of production. This simply means that the business unit should have enough money to buy adequate land since often businesses have to expand their premises. For a business to be successful then it should have adequate land to carry out its business activities and land is a competitive factor; hence they should strain to get the best available land according to the land use. Marketing business units should also strain to get land near their market while mineral based business units should strain to get land within their mineral extraction place and the market. Capital is the money needed to start and run a business. The business units should find the best financial institution where they can get access to loans and other financial support to run their businesses. Finally, according to Marxian’s view on competition a firm should also strain to compete with the other firms in order to effectively making adequate profits. This means that for a firm to run effectively then it must initiate ways and methods which it shall use too compete in the market. This can be either through appropriate product promotion methods, producing the highest quality of goods at very fair prices or advertising for the products. Marshallian/neoclassical views on competition Neoclassical theory explains on perfect competition market whereby all the sellers or the firms produce homogeneous products and the consumers as well have perfect knowledge about the products the firms are selling to them. It also has some conditions that both the producers and the consumers. This is because of their large number or small size, which makes them incapable of influencing the price of the product. The firm does not basically own many factors of production, so they have to hire services for maybe transporting to the market and the marketers. It also states that if a firm encounters a very large marginal profit within a short period then there should be some imperfections in the product or else experiencing some degree of monopoly. The theory simply avoids the falling of prices in one firm producing homogeneous products with other firms to avoid the closure of the other firms which will lead to unemployment and monopoly in the market. So, firms producing the same products must have equally the same price for their products to prevent some of firms lowering their prices to attract more consumers. Australian (Schumpeter) views on competition According to Schumpeters view on competition, competition depends on the use of technology, the size of the market and the competition strategies. This means that for a firm to be competitive then it should use the latest technology available to the consumers in order to attract a large number of consumers. The firm or business unit must also have a large market to deal with in order to make sure that it maximizes its profits. Through the use of the latest technology, finding a broad market will not be an issue. Schumpeter also states that the competition strategy must be implemented to ensure maximum profits are gained in the business. Competition strategy begins from competing for workers to competing for land, and this should be enhanced through using the right advertising methods. Australian (Schumpeter) and neoclassical views on competitiveness Australians emphasize on competitiveness, that for a firm to be willing to compete with other firms, it should be using the latest technology, having a large market, and it should be using the right competitive channels. According to neoclassical views, the competitiveness should be based on knowledge of the entrepreneur (McKelvey and Holmen 2010). Concepts of competition and their policy implication For the competition to be effective, there must be some concepts that would make the competition fair in one way or the other. Obviously, in a competition there is usually a winner and the looser and all the competing firms in the market are competing to win, and none wants to lose. For the firms to win, they have to make sure that they produce the best goods and services at the smallest prices possible to maximize their profits. The concerned government should also set policies to avoid unhealthy competition through either by producing low quality goods and services or by any use of other fraud means to abuse the consumer. UK competition policy The UK competition policy promotes competition in long monopolized sectors whereby businesses can be established to compete with the monopoly organizations and firms to initiate better services and goods (Motta 2004). It also provides a good set of enforcement tools to ensure that the policy is followed and adhered to and wants the OFT to be an independent organization. UK competitive policy In the UK competitiveness has now been based on the regional margins where the UK has been divided into various regions and each has a regional development agency to work on the regional development. The regional development agencies have been given a mandate to make their regions more competitive by using their own legal means such as benchmarking (Bristow 2010). Conclusion UK should review its competition policy to ensure that there is fair competition in the business firms and, therefore, they should formulate a policy that will provide equal chances to all business units. The country should adopt more policies to ensure that there is no monopoly in their markets as a way of providing the consumers with the best quality goods and services at the best prices. References Bristow G. 2010. Critical Reflections on Regional Competitiveness: Theory, Policy, Practice. Routledge Tan W. 2014. Principles of Project and Infrastructure Finance. Routledge McKelvey M and Holmen M. 2010. Learning to Compete in European Universities: From Social Institution to Knowledge Business. Edward Elgar Publishing Motta M. 2004. Competition Policy: Theory and Practice. Cambridge University Press Read More