COMPETITION :

Why is competition seen as beneficial for consumers and the economy as a whole?

Competition is important because it is a mechanism for driving out inefficient producers. Competition forces producers to lower prices, or improve their product to attract consumers. When producers compete, they look for ways to make things more cheaply, so that they can lower their prices even further.

What are the potential gains from increased market competition?

• Lower prices for consumers
• A greater discipline on producers/suppliers to keep their costs down
• Improvements in technology – with positive effects on production methods and costs
• A greater variety of products (giving more choice)
• A faster pace of invention and innovation
• Improvements to the quality of service for consumers
• Better information for consumers allowing people to make more informed choices

Lack of competition or absence of it will increase prices as the product or service is or nearly is a monopoly. With competition, the low cost producer will have the advantage (price) and the consumer will benefit.

 

The fight for the lucrative instant noodle market in India is getting more tangled.

The latest to join the battle along the likes of Top Ramen by Nissin and Foodles by Horlicks is Yippee Noodles by Sunfeast ITC. Even private label brands such as Tasty Treat by Future Group (Big Bazaar retail chain) have been launched in the market.

The Indian noodles market is worth INR 1,500 crore and is seen growing at 15 to 20 per cent annually.  Nestle India Ltd remained the dominant player in noodles at the end of the review period with a 60% share of retail value sales in 2013. Its Maggi brand was the most entrenched instant noodle brand in India in 2013. The brand has performed very well due to the wide distribution network and aggressive marketing of Nestle India. The brand enjoys a high level of loyalty as Maggi was the first instant noodle brand to be introduced in India. Nestle India has also been proactive in launching new variants, such as Maggi Dumdaar noodles and Maggi Curry Noodles.