How do economists approach competition? Does this approach suffice for businesspeople?

Question

What will be an ideal response?

Answer 1

Economists have worked with many different models, each marked with one form or another of the competitive label. Still central to much of their work is the model of perfect competition, based on the premise that (1) there are a large number of buyers and sellers in the market dealing in homogeneous products; (2) there is complete freedom to enter or exit the market; and (3) everyone possesses complete and accurate knowledge about one another.
From the businessperson’s perspective, competition refers to rivalry among firms operating in a market to fill the same customer need. The businessperson’s major interest is to escape from competition to keep the market to himself/herself by adopting appropriate strategies. How and why competition occurs, its intensity, and what escape routes are feasible through adopting what strategies has not been conceptualized. In other words, there has been no theory of competition from the viewpoint of businesspeople.