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					3.02 Explain the
   concept of
  competition.
Competition
   The rivalry between two or more
    businesses to gain as much of the
    total market sales or customer
    acceptance as possible.
Competition continued . . .
  Helps to maintain reasonable prices,
   provides consumers with new and
   improved products, and results in a
   wide selection of products from
   which to choose.
  Forces businesses to operate
   efficiently.
Types of competition
1.   Direct competition
2.   Indirect competition
3.   Price competition
4.   Non-price competition
5.   Monopolies
Direct competition
 Involves two or
  more companies
  that utilize the
  same type of
  business format.
 Example Coke and
  Pepsi
Indirect competition
   Between two or
    more retailers that
    employ different
    types of business
    formats to sell the
    same type of goods.
   Example: Playing
    Putt-Putt versus an
    18 hole golf course.
Price Competition
   Focuses on the
    selling price of a
    product.
   Preferring to buy
    the products that
    are the lowest in
    price.
   Purchasing clubs
    at Wal-Mart
    versus a golf
    specialty store.
Non-price competition
   Based on factors
    not related to
    price.
   Includes: quality
    of products,
    customer
    services,
    business location
    and qualifications
    of salespeople.
Monopolies
 Exist when one company has
  exclusive control over a product or
  the means of producing it.
 The free enterprise system prohibits
  monopolies except when it is
  wasteful to have more than one
  company.
 Ex. There is only one football team
  per area.
Do you know??
   Dollar tree
       Price
   Panthers vs Jaguars
       Direct
   Nike has high quality shoes
       Nonprice
   Angelina vs Jennifer (actresses)
       Direct
   Champion sports vs Walmart
       indirect
Do you Know??
   One gas station in a town
       Monopoly
   Giving free wrapping paper w/
    purchase
       Non price
   Toys R Us vs KB Toys
       Direct
   Discounts
       price
Profit
 The money earned from conducting
  business after all costs and
  expenses have been paid.
 Profit for most businesses is 1-5% of
  sales.
 95-99% of the selling price goes to
  pay costs, expenses and business
  taxes.
Loss
 A decrease in a potential profit.
 Potential for loss or failure.
 Risk Management – how to
  effectively manage losses due to
  risk.
Sources of revenue
1.   Admission
2.   Food and beverage sales
3.   Parking
4.   Merchandise sales
5.   Sponsorships
6.   Naming rights
Sources of expenditures
1.   Performer fees
2.   Rental or leasing of facilities
3.   Advertising
4.   Incentives or in-game promotions
5.   Food and beverage services
6.   Security staff

				
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posted:9/7/2012
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