In the article, entitled “Welcome the new consumer”, Alexandra Lopez-Pacheco suggests that, as a direct result of developing technologies, producers are experiencing ‘intense’ competition. This intense competition, caused by an increase in supply, is putting pressure on producers to better quality and decrease price. In extension, globalization and online ‘stores’ allow consumers to have access to a seemingly infinite amount of products, which intern allows them to access more substitute products.
In order to avoid being ‘beat out by the competition’ many companies will be forced to look at their break even point; to determine if they are able to lower prices and thus be competitive in today’s global market. In contrast, companies could try to differentiate their products in an attempt to detract customers from buying substitutes.
One could extend this article to imply that, as a result of technology, a large biding war is occurring on a global scale . Weather or not this is beneficial depends on your perspective. As a consumer I believe this to be excellent, as it is likely to decrease the cost, and subsequently the opportunity cost, of purchasing a variety of products. However, from a producers perspective this increase in competition, causing a decrease in demand of various products, is likely to have a negative impact upon their ‘bottom line’.
Source:
Lopez-Pacheco, . “Welcome the new consumer.” Vancouver Sun 21 sept 2010: n. pag. Web. 26 Sep 2010. <http://www.vancouversun.com/business/smart-shift/fp/Welcome+consumer/3551652/story.html>.