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A profitable business is bound to attract competition in form of interested investors that seek a share of the profit that the market provides to the customers. In order for the business to survive it has to deal with competition in the expeditious manner and come up with the best solution that will make it the best choice among the market. Increased competition means that there is more in supply while there might not be any change in the demand (Kotler, 2000). Competition is viable for the customer since he or she has a variety of products from which to select (Czinkota & Kotabe, 2001).
He is also guaranteed that there will be an increase in the quality of the product. On the other hand, the competition may decide on unscrupulous business practices in order to capture the attention of the customers. They may lead to the development of policies and advertisements that are misleading and hyped such that the customer is the loser (Winer, 2004). From the management perspective, increased competition is a headache since they have to safeguard their market and work harder to move into the new markets. This paper will present an argument proposing that the increased competition in the market place is a disadvantageous predicament (Budzinski, 2004).
To the stockholder, the increased completion is a threat to their dividend payout since the competition will affect the profitability of the organization. Being able to deal with the issue of competition is therefore and interest for the management and owners of the company. Competition affects the profitability through price wars that hurt the prospects of the stockholders gaining any profits and the management attaining their targets. Any time a new entrant comes in the market, there is a chance that the company will lose out some of the customers to the new player. Strategies have to be put in place to deal with the issue of increased competition (Pride & Ferrell, 2008).
Increased competition is a problem since it affects the cost of the product offering. The new entrants will seek to attain their economic profitability by selling the product at a higher price compared to the standard one. They may increase the cost of the product or the perception of the product by creating misleading adverts that create the perception in the minds of the consumers that the product is better than the others in the market. Eventually, the products, which are essentially the same, end up being sold at a higher price compared to the initial players (Sheehan, 2011). The additional frills end up making the product less affordable for the consumer. In the worst case scenario, it may lead to a substitution effect whereby the high prices for the products will drive the customers to the other products.
Increased competition may lead to the reduction of the quality of the products. Quality is often costly and since the companies are focusing on the sales volume, they may neglect the quality of the products offering such that the consumer ends up paying for a product that is substandard. Quality issues may affect the enjoyment of the service of the product. Quality issues also have an ethical perspective whereby some of the businesses may bend some of the rules in the industry in order for them to break even. Therefore, competition is an undesirable outcome that often hurts the customer more than it adds value to him.
References
Budzinski, O. (2004). The international competition network: prospects and limits on the road towards international competition governance. Competition & Change, 8(3), 223-242.
Czinkota, M., & Kotabe, M. (2001). Marketing management. Cincinnati: South-Western College Pub.
Kotler, P. (2000). Marketing management. Upper Saddle River, N.J.: Prentice Hall.
Pride, W., & Ferrell, O. (2008). Marketing. Boston: Houghton Mifflin Co.
John F. Kennedy International Air Terminal (JFK) situated in the municipality of Queens on Long Island is the only airline terminal that is operated privately serving both New Jersey and New York metropolitan areas. Terminal 4 was officially opened in the year 2001. Competitive analysis is an important part of the business plan because it helps to identify the extent of competition in the relevant industry. After identifying the intensity of competition in the relevant industry, it will be possible to develop and implement appropriate strategies that can distinguish the products from those of the competitors (Tillman, 2015). In this paper, competitive analysis will be done to establish how to increase revenues and growth of JFK International Air Terminal Inc. from the sale of food and beverages.
Market Analysis
There are various competitors in the food and beverages industry who provide foodstuffs to customers thus posing competition to the food and beverage provided by JFK International Air Terminal Inc. Their main competitor is Kitchensurfing restaurant. To start with, Kitchensurfing has implemented strategies that meet the needs and expectations of the customers. To begin with the restaurant provides services like preparing the meals of the customer right in their kitchen (Brown, Bessant & Lamming, 2013). This is important for the customers since they understand the ingredients of the foods they are eating. In Addition, the organization provides quality foods since the foods and drinks are served with local eateries. The chefs of the restaurant are also experienced and this means that the foods prepared are of good quality meeting the needs and expectations of the customers.
Competitive strategies
Considering the extent of competition in the food and beverage industry, JFK International Air Terminal Inc. has the opportunity to increase its revenue and growth by selling food and beverages. The following are the strategies that can be applied to increase the revenue and growth from the sale of food and beverages;
Product development: First, the food and beverage products should be developed to meet the needs and expectations of the customers. Since the airport terminal serves both local and international visitors, there should be a variety of menus to choose from. For instance, there can be local and Chinese prepared foods hence each customer will have something on his or her plate. The target market for the food and beverage products includes the staff working at the restaurant and the visitors. In this way, the food and beverage products will be unique in terms of the ingredients considering the target market and their expectations (Mahnken, 2012). Total quality management strategy will be applied to ensure that the quality of products and services satisfies the needs of the customers.
Direct distribution strategy: The other competitive strategy is to offer unique products and services. The food and beverage products will be sold directly to the customers. This implies that there will be no outsourcing of services since there is a restaurant within JFK International Air Terminal Inc that provides the products and services to the customers. In addition, there should be suggestion boxes where the customers can drop their feedback regarding the satisfaction they derived from the products and services provided. The feedback will be helpful in developing unique strategies like unique menus such as Chinese menu and this will help to attract and retain more customers leading to increased revenues and growth (Brown, Bessant & Lamming, 2013).
1.Competitive pricing strategy: In order to increase the sales of the food and beverage products, competitive pricing strategy is the strategy to apply. This means that there will be no fixed prices, but the pricing of the products and services will depend on the prevailing market conditions. However, the prices should always be slightly lower as compared to those of the competitors with the aim of attracting and retaining the customers (Goldstein & Lee, 2005). This is important since the needs of the clienteles will have been taken into consideration thus beating the competition.
2.Online promotional strategy: Further, in order to create awareness of the food and beverage products offered at JFK International Air Terminal Inc, there should be effective promotions. The social sites that can be used to promote the products include Facebook, Instagram and Twitter (Claire, 2009). Online promotion will help to reach out to a wider number of visitors passing through JFK International Air Terminal Inc. This will help to influence the decisions which are made by the customers thus attracting and retaining customers leading to increased revenue and growth.
Conclusion
Competition is the statement that shows the strategies applied by an organization to gain competitive advantage. The most important traits that should be considered when doing the competitive analysis include:
1.Identifying the strategies applied by the competitors
2.Formulating the strategies can create competitive advantage.
Developing the competitive analysis strategies effectively will help to increase the revenues and company growth. Most important factors that should be considered include products, pricing, distribution and promotional strategies. This will improve revenues and growth of JFK International Air Terminal Inc.
Reference
Brown S., Bessant J. and Lamming R. (2013). Strategic operations management. New York N.Y: Elsevier
Goldstein M. and Lee J. (2005). Directory of high-volume independent restaurants. (2007). New York, N.Y: Business Guides, Inc.
Mahnken, T. (2012). Competitive Strategies for the 21st Century: Theory, History, and Practice. Palo Alto: Stanford University Press.
Tillman T. (2015, October). Strategic operations management. Retrieved from http://hiaa.ca/at the-airport/food-beverage/
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