competition

Open market rivalry in which every seller tries to get what other sellers are seeking at the same time-sales, profit, and market share by offering the best practicable combination of price, quality, and service. Where the market information flows freely, competition plays a regulatory function in balancing demand and supply.

One useful but fairly uncommon type of contract stipulation is a most-favored-customer clause. Under such an arrangement, no one gets a better price than this customer, or if someone else does then this customer's price drops to that level. This affects future negotiations (it makes things tougher on that customer's competition, and it gives the vendor an excuse not to negotiate with them, if that's what the vendor wants, since its hands are tied.) But it's then easier for that vendors rivals to target its customers, and harder for it to do the reverse. Sometimes this raises the price the vendor can charge, because each customer doesn't negotiate as much, assuming future customers will.

• What differentiates your product from competitors'?
• How big is the threat of new entrants?
• Surf Ahead of the Wave
• What price will consumers pay?
• The Best Assurance of Continued Growth
• Apple says: Plus It!
• The Price of Competition
• Suppliers and Customers as a Competitor
• Who Speaks of Free Enterprise and Competition Most