Changes and Challenges of Market Competition

Changes and Opportunities

• More choices. As the market is liberalized and barrier to market exit and entry are removed then consumers should have a greater choice of suppliers, services and prices.

• Lower prices. As competition within the market intensifies among the different providers this should lead to lower prices for consumers. Each provider will seek to gain an advantage over their competitor with the best way of doing this being to create a price differential to attract new business.

• Better quality. Competition will also likely produce differences in service quality that is offered by provider as they continue to seek competitive advantage over their rivals. Along with price, improvements in quality and performance are an effective method of doing this.

Challenges

• While liberalization will lead to more providers, services and price points in the market this will mean consumers will have more difficulty in choosing which service is right for them. When services of general interest are provided by state-owned or controlled monopolies consumers, because they have no choice also have no work to do in terms of how they get their service. With a large number of competitors and services to choose from consumers must learn to behave differently and learn to differentiate between services, providers and prices. This can sometimes become bewildering.

• With new competitors, services and differentiating factors strong legislation will be required to ensure consumer’s rights are protected

• An increase in the size and diversity of the market will make strong consumer education and training necessary and urgent in order to enable them to become vigilant against infringements on these rights.