Competition Advantages for Producers and Consumers Essay

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Competition is the concept of business people or institutions working towards gaining the greatest market share for their products, both goods and services. Competition is very instrumental in the growth of any industry. This is because as the market environment becomes crowded, companies and other business establishments have to come up with new products or services that would help them cut a niche.

This essay seeks to look at the advantages of competition among producers of goods and services to the consumers of given products. To this end, two of the greater benefits of competition will be analyzed before a counter-argument to the advantages is provided.

Three articles on the topic of competition will be used to define the boundaries discussion and they all have been chosen because of their relevance to the argument that competition brings about great benefits to the customers.

The first article Fear of losing: Using competitive instincts to your advantage generally suggests that manufacturers and product makers tend to win customers by proving that the customers cannot do without their given product. Moreover, the author says that competition is a big part of the life and it manifests in both social and economic aspects.

The second article titled Sports: When winning is the only thing, can violence be far away? by Robert Stewart mainly illustrates the fact that competition particularly among product makers and manufacturers tends to come with negative effects especially if proper regulatory measures are not taken.

The third article titled Dr. Spock says today’s parents should teach less competition by Clayton Finchley tries to illustrate that constantly encouraging the spirit of competition to children ends up bringing about the negative sides of individuals once they grow up.

The greatest beneficiary of competition, however, is the customer who ends up having the advantage of choice aside from getting the same product at a much reduced cost. These two primary benefits arise from the fact that as more and more manufacturers and providers of a similar product enter the field, they tend to try and add new changes to the items they produce with the aim of winning more clients.

As illustrated by Stewart in his article, sometimes winning is the only thing on the minds of individuals and this tends to manifest in the form of intense competition. These ‘upgrades’ come at the same price as the original product and therefore allow the customer the advantage of choosing what to go for from the variety that is placed before them.

As far as the prices and costs of products and services are concerned, competition among product and service providers translates into a reduction in the source price of commodities. This is because as more and more of the same good/service infiltrate the market, the producers have no option but to revise downwards the prices at which these items are given to the consumer.

This competitive strategy for winning more clients has been supported in the article titled Fear of Losing, and even with its negative effects, has been found to be one of the more effective ways of dealing with competition. This has been the status in the mobile telephony providers in most countries where one company enters the market as a dominant party and when other entrants come, they are forced to come with ridiculously low offers on service prices.

Under normal circumstances, a price war ensues with all providers reducing the costs of calling and messaging, leaving the customer to benefit.

In countering these benefits, it can be argued that as much as competition results in more choices for the customer, the quality of the commodities tends to go down. This is because in a bid to make products that will cost less in the market, the manufacturers and producers will have to be flexible enough to cut down on the costs of production by using materials of lower grade/quality.

This challenge in turn translates to a low-quality final product. When it comes to price reduction as a gain made out of competition among manufacturers and producers of goods and services, the argument can be countered by citing examples where competing companies collude to maintain the prices at a given high.

This therefore means that competition does not immediately translate into financial benefits for the customer. As a matter of fact, it can result in a raise in the prices of commodities as competing entities form associations to help them benefit at the expense of the customer who is left with no other choice but to go for the products being offered.

This factor of competition not being beneficial to any of the involved parties has been well illustrated by Clayton Finchley’s article.

In conclusion, it can be said that competition amongst product manufacturers and service providers to a great extent ends up benefiting the customer. An analysis of two of the major benefits of competition to the consumer has been provided alongside counter-arguments for the two listed benefits. The focus of this essay has been guided by three articles on the benefits of competition.

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IvyPanda. (2018, May 17). Competition Advantages for Producers and Consumers. https://ivypanda.com/essays/competition/

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"Competition Advantages for Producers and Consumers." IvyPanda, 17 May 2018, ivypanda.com/essays/competition/.

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IvyPanda. (2018) 'Competition Advantages for Producers and Consumers'. 17 May.

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IvyPanda. 2018. "Competition Advantages for Producers and Consumers." May 17, 2018. https://ivypanda.com/essays/competition/.

1. IvyPanda. "Competition Advantages for Producers and Consumers." May 17, 2018. https://ivypanda.com/essays/competition/.


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IvyPanda. "Competition Advantages for Producers and Consumers." May 17, 2018. https://ivypanda.com/essays/competition/.

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