APPLIED ECONOMICS to support this strategy.

For example, you may try to have

Lesson 1: Principles, Tools, and Techniques a low cost advantage with less manpower. If you can
purchase expensive equipment that allows you to produce
COMPETITION the same amount with less personnel, this may be quickly
-​ Is the rivalry among sellers trying to achieve such goals as imitated.
increasing profits, market share, and sales volume by 3.​ Anticipate the consequences of your pricing strategy.
varying the elements of the marketing mix: price, product, One of the most common reasons to start a venture is the
distribution, and promotion. (Economics) belief that you can under-price your competition and grab
-​ The effort of two or more parties acting independently to their market. This usually results in a price war which
secure the business of a third party by offering the most newcomers rarely win, unless the incumbent was
favorable terms. (Merriam-Webster) previously a monopoly with legacy overhead they cannot
-​ The exercise of allocating productive resources to their easily reduce.
most highly valued uses and encouraging efficiency. 4.​ Have contingency plans.
(Adam Smith 1776) It is best to have contingency plans on how to operate in
-​ Causes commercial firms to develop new products, the event of competitors entering the market. One of the
services and technologies, which would give consumers best strategies is to have reserve cash to give you more
greater selection and better products. (Microeconomic flexibility in pursuing options.
Theory) 5.​ Check if the company owner has an emotional
-​ It is a condition where buyers tend to compete with other attachment to the business.
buyers, and sellers tend to compete with other sellers. Sometimes you may be wondering why a particular
establishment is still operating, although it appears that it is
COMPETITION AS A FACTOR IN BUSINESS PLANNING barely making ends meet. It may be that this is the first
1.​ Study the barriers to entry in the industry. venture or branch of a large group of companies and that
Not every business has intense competition. There are the owner has a sentimental attachment to his/her first
industries that are difficult to get into for a variety of money maker, If this is the case then be prepared to
reasons. For retail establishments, there may no longer be co-exist with this business for an unlimited amount of time
suitable locations in your area. For certain service as the owner may not allow it to close.
businesses, the attraction of the brand name of your 6.​ Have frequent reassessments.
business may deter competition. In manufacturing, you In a nutshell, what is needed to factor in the competition is
may be in possession of a patent that prevents others from to thoroughly study the strengths and weaknesses of
making the same item. present and potential competitors and see how this
2.​ See if you have or can create a sustainable knowledge can help you craft more effective plans.
competitive edge. Anticipating a vigorous response from the competition is a
Since for the majority of businesses you will encounter wise and more realistic assumption in drawing your plan.
opposition, look for ways to have an edge that is not easily
copied. An effective way to do this is by differentiating your
product or service and aligning your resources and efforts
PCA AND ITS IMPLEMENTING RULES AND REGULATIONS approach the demographics where they are already strong
Philippine Competition Act (PCA) and deepen ties with loyal customers, as well as reach out
-​ Also known as R.A. 10667, is the primary competition to wholly new demographics to cultivate a public where
policy of the Philippines for promoting and protecting sales are weak, thus creating a new base of customers for
competitive market further expansion.
-​ It was passed in 2015,and is expected to improve
consumer protection and help accelerate investment and Supplier may refer to:
job creation in the country, consistent with the national ●​ Manufacturer, uses tools and labor to make things for sale
government’s goal of creating more inclusive economic ●​ Processor (manufacturing), converts a product from one
growth. form to another
This act reflects the belief that competition: ●​ Packager (manufacturing), encloses products for
●​ Promotes entrepreneurial spirit, distribution, storage, sale, and use
●​ Encourages private investments, ●​ Distributor (business), the middleman between the
●​ Facilitates technology development and transfer, and manufacturer and retailer
●​ Enhances resource productivity. ●​ Wholesaler, sells goods or merchandise to retailers
●​ Franchised leadership, local franchised distribution
The Implementing Rules and Regulations (IRR) shall cover all the
mandated functions and duties of the Philippine Competition COMPETITORS
Commission to facilitate the implementation of the provisions of -​ Are any person or entity a rival against another, or a
the Republic Act 10667. company which offers similar products or service

CUSTOMER Guide in analyzing your competitors:

-​ Is an individual or business that purchases the goods or ●​ Who are your competitors?
services produced by a business. ●​ What you need to know about your competitors?
●​ Learning about your competitors
●​ Customers are Consumers ●​ Hearing about your competitors
Customers are defined by their purchase of goods, or their ●​ How to act on the competitor information you get
contracting for services, as the consumer, or end user.In
short, they are the end consumer of a product. You can get clues to the existence of competitors from:
●​ Customers Spend their Own Money ●​ Local business directories
Customers are also likely to purchase with their own​ ●​ Your local Chamber of Commerce
money, or the money given to them by others who know ●​ Advertising
them personally. ●​ Press reports
●​ Customers Can be Studied ●​ Exhibitions and trade fairs
Knowing the demographic profile of the people who shop ●​ Questionnaires
with a business builds up a picture of the “ideal customer”, ●​ Searching on the internet for similar products or services
or “customer persona”. This information helps companies ●​ Information provided by customers
 ●​ Flyers and marketing literature that have been sent to you - What they’re planning to do
quite common if you’re on a bought-in marketing list Try to go beyond what’s happening now by investigating your
●​ Searching for existing patented products that are similar to competitors’ business strategy, for example:
yours ●​ What types of customer they’re targeting
●​ Planning applications and building work in progress ●​ What new products they’re developing
●​ What financial resources they have
What you need to know about your competitors?
Monitor the way your competitors do business. Look at:
●​ The products or services they provide and how they
market them to customers
●​ The prices they charge
●​ How they distribute and deliver
●​ The devices they employ to enhance customer loyalty and
what back-up service they offer
●​ Their brand and design values
●​ Whether they innovate - business methods as well a
products
●​ Their staff members and the caliber of staff that they attract
●​ How they use IT - for example, if they’re technology-aware
and offer a website and email
●​ Who owns the business and what sort of person they are
●​ Their annual report - if they’re a public company
●​ Their media activities - check their website as well as local
newspapers, radio, television, and any outdoor advertising

How they treat their customers

Find out as much as possible about your competitors’
customers, such as:
●​ Who they are
●​ What products or services different customers buy from
them
●​ What customers see as your competitors’ strengths and
weaknesses
●​ Whether they are any long-standing customers
●​ If they’ve had an influx of customers recently