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Advantages and Disadvantages of Competition: Pizza Case Study

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Introduction

´╗┐Advantages and Disadvantages of Competition: Pizza Case Study There are now many places on the high street where you can buy, and often take away pizza as well. In the 1990s however this was not a big industry and prices were often expensive, due to lack of competition unlike today, where prices are constantly being pushed down due to more competition. Competition can have advantages as it offers a more diverse choice for consumers. Having more competitors of the same product type (pizzas) allows the consumer access to a wider range of variety, which helps push innovation in the market as firms have to come up with new ideas in order to attract customers. ...read more.

Middle

This is a big advantage for consumers as it allows consumers access to not only a cheaper product, but also a higher quality one such as Domino’s Heatwave invention allowing consumers to have hot pizzas at the customers door, to justify the extra price compared to other smaller firms. The large number of firms in the market lead to price competition, which is an advantage for consumers as some prices dropped to as low as £1. However, competition can have disadvantages. In some cases, due to the extra cost needed to promote the firm’s products prices may rise instead of fall, an example of this being Pizza Hut being forced to use colour leaflets to create a bold image when it would not have been necessary when Pizza Hut was only one of the few pizza firms. ...read more.

Conclusion

to drop, and this is sometimes the case with smaller firms as in order to be cheap, their products use ingredients such as reused oil which can have a long term negative health effect on the consumer. Competition can have both positive effects, such as decreasing prices for the consumer and offering a wider variety of choice, as well as promote innovation. However in some cases it can lead to firms being forced to spend more money in order to promote their services, and this can lead to raised prices for the consumer. Another issue is that firms may also choose to rely on cheaper ingredients in order to market their pizza at a cheaper price to the consumer, and this can lead to long term negative health effects. ...read more.

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