An Organization Does Not Need Any Strategy If It Is Not in a Competitive Situation
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Im going to try to give my opinion about the validity of this claim, and also Im going to answer the questions which have been done in parallel. From my point of view this claim is not true, and I will try to justify it. This sentence contains two words which are very important to understand my argumentation. These words are “competitive situation” and “strategy”. I will explain one by one. We know that a market is an actual or nominal place where forces of demand and supply operate, and where buyers and sellers interact (directly or through intermediaries) to trade goods, services, or contracts or instruments, for money or barter. The structure of these markets depends on the type of competition between companies, so in a market we can talk about competitors, and who is a competitor? – Organizations offering the same product or service now. – Organizations offering similar products or services now. – Organizations offering a variation on a product or service that you cannot – Organizations that could offer the same or similar products or services in the future. – Organizations that could remove the need for a product or service we sell. These competitors produce a competitive situation, and we can talk about 4 different types competitive situations: – Pure Competition: o Low barriers to entry, many choices, no business has dominance. o Many companies competing and nobody has a significant advantage. – Oligopoly: o Very similar products, few sellers, small firms follow lead of big firms, and fairly inelastic demand. o Many barriers to establishing a business so only the oldest and biggest businesses are operating. – Monopolistic Competition: o Sellers feel they do have some competition. o There is one big company which dominates the market with a few medium or smaller sized companies. – Monopoly: The author is referring to this situation when he said that: “An organization does not need any strategy if it is not in a competitive situation “because monopoly is a market structure in which one firm makes up the entire market, so the organization does not encounter any competition in what it does Monopoly, therefore, indicates a case where:
o There is only a single seller of a product or service in the market. o The goods produced by a sole seller has not close substitutes. o The entry of new firms into the industry is effectively barred by legal or natural barriers. o The firm being the sole supplier of a product constitutes industry. Firm and industry thus have single identity. Or we can say monopoly is a single firm identity. o The single seller affects no other seller by its own action in the market. The other sellers too cannot affect the price and output of the monopolist. o The demand curve facing the monopolist is negatively sloped. The monopolist being the only seller of the commodity in the market can increase the total sale by lowering the price and if, he raises the price, he would not lose