- BACKGROUND OF THE STUDY
Business firms operate in a society to satisfy individual and social needs through the production of goods and services. Their decisions influence and are influenced by what is happening in the society. The social economic and political institutions that make up a society constitute in a broad sense the environment of business enterprises and the way they work, affects the operations and fortunes of every business unit.
The motivating factor for the entrepreneur to go or venture into businesses is to make profit. The objective of a business firm however goes beyond profitability only; it includes growth in size, increase in market share, innovation and social objectives. The realization of these objectives will be determined largely by the happenings in the environment. Specifically, the environment of a business comprises those activities that can hinder or facilitate the achievement of its objectives. They include population, technology, social infrastructure, economic system and competitors. Our focus in this study therefore is on the impact of the activities of the competitors on a business firm. Customers have a choice to go elsewhere if a particular firm’s products or services do not meet their needs. They can go to the competitor who may claim they can do better or better still who satisfies their needs. This means that the activities of competitor in the same industrial sector as a company also affect a firm’s prospects and operations. The type and quality of products that competitor offer, the price they charge for their products or services, their sizes locations, reputation, distribution channels and usual stock level maintained, are some of the things about competitors which shape the operations of a business. No business firm can ignore the actions and decisions of its competitors in a modern economy characterized by competitions.
Fierce Business Competition in Modern Economy:
We operate an open market economy where competitions thrive. Increased competition is being driven by many factors, including the emergences of a global market place, the increase number of firms, new technology that makes it easier for firms to enter new markets and ever-increasing pressure from securities market to raise shareholder value.