Competive Situation

• → Sustainable Competitive Advantage: the ability of a business to develop strategies that will ensure it has an ‘edge’ over its competitors for a long time 
• → Market Concentration: the number of companies in a particular market including:

  → Monopoly: complete concentration by one business in the industry (eg: Aus Post)

  → Oligopoly: a small number if karger businesses that dominate the market (eg: banks)

  → Monopolistic Competition: goods and services sold differentiated from competitors using methods such as packaging and brand names (eg: clothing manufacturers)

  → Perfect Competition: large number of small businesses that are similar (eg: fruit grocers)
• → Other factors impacting a businesses competitiveness:

  → number of companies

  → ease of entry into a market for a new business

  → local and foreign competition 
• ALDI (2001)


  Supermarket chain
• ALDI's strategy to compete against competitors

  • Focused on low prices compared to other supermarket chains by eliminating trills (eg: advertising)
  • Stocked their own private label brands allowing them to control costs while still maintaining quality of their stock and products sold to consumers
  • Carried limited product selection contributing to its low prices by streamlining operations and reducing overhead costs
• ALDI's entry into Australia

  Drove significant price deflation, resulting in savings for all grocery buyers (other supermarkets decreasing their prices in fear of loss of customer loyalty and a better chance of competitive advantage)