Collusion VS Competition of Service Sector

Service sector?

In this report, “Collusion VS Competition of the Service Sector,” we discuss the service sector, which produces intangible goods and more precisely services instead of goods. This sector comprises various services related to warehousing as well as transportation. The information services, securities, and health and care industries are also examples of the service sector.

This sector provides the services that are initial or necessary for operating the entire performance of the businesses. Those countries that around their economies across the sector of services are considered more advanced as compared to those counties that have lesser sources of the service sector. This sector offers non-tangible components for the customers through the process of the businesses.

It is the 3rd sector of the economy after implementing the new materials and producing the manufacturing thoughts that are reliable in particular terms.  There is a wide variety of services are provided by this sector that increases the overall performance and gets the detailed values as given in the particular resource.

The industrial economy determines the observed values and relationships with the best practices and it is a part of the business’s success. Waste management and health care or social services are the key Intel give services offered by this sector at the global marker. It is known as the 3rd tie in the economy of the three sectors.

Read more: Research Methods for the Service Sector – Jet2Holidays

Examples:

Various examples of the service sectors in which housekeeping, training or consulting, maintenance, nursing, teaching, and the employment of individual or entire level of communication exists. By contrast, the individual employees in the industrial as well as manufacturing sectors that produce the equipment, clothes, and cars which affect the economy of the country and develop the best planning towards improving the overall business performance. Counties heavily emphasize the sector of services due to higher levels of demand.

Collusion vs Competition:

Collusion is an agreement and process between two or more two competitive fields to coordinate their auctions. These firms intended to raise the overall rate of prices as a monopoly. The limited production of the market and the higher prices of the services by the agreement of competitive firms is known as the collision.

There are three forms of collusion in which explicit, tacit, and formal exists. It will limit the open market competition and lead the collision parties. To gain extensive competition in the market, the collision determines the better plans and evaluates the key resources very well. For the sake of gaining an extensive competitive advantage in the marketplace, there is a strong collaboration exists between the competition as well as the overall processed marketplace.

The concept is diligence because it refers to the mutual benefit of all the companies that coordinated. Collusion is defined as taking place when rival firms who otherwise can’t work together agree to cooperate for the same benefits.

On the other hand, competition is the characteristic that person company has to compete with more companies as effective industry peers.

Competition occurs in different ways that increase the performance of the business and balance the situation among the companies. Based on the prices, core techniques, and better valuables terms, the companies compete on different characteristics. It is reliable for companies to get more customers when offering the best or clear advice.

The competition firms are interdependent that enhance the organizational values and coordinate clear plans. Various activities have been used that help to gain success and observed the best tools. By changing the prices as well as similar techniques, the overall processes are strong that encourage better practices. Competitive firms can’t afford to ignore the actions as well as reactions of other firms that exist in reliable sources to maintain the best practices.

International collusion in the service sector.	International competition in the service sector.
When the firms in the process of oligopoly market structure try to invite new entrants into the market to make it more competitive.	Competition is when firms operate independently through the values of clear resources.
When firms act together in a way to reduce the output then it keeps all the prices as high and divide up to the markets.	Competition is the process when the firms operate in reliable and sustainable activities very well. When the business determines strong success forms then it needs to raise growth in the future.
Collusion occurs when the companies operate their functions independently.	The competitive firms follow the price changes as well as product changes in an oligopolistic market.
Collusion is when firms follow the price changes and the product changes of the dominant firm in an oligopolistic market.	There is strong competition when firms operate independently.

In the service sector, the overall competition among the company determines by the collaborative change as it deals with the international market. Collusion is the process that raises the prices high of all services through the mutual understanding of the companies that are integral or reliable parts of the economy of the country. Various activities are used by the business that determines the overall planning and examines the best values.

The competitive firms follow the key activities that operate from reliable sources and maintain the best values in the given or reliable values. When the firm follows the price changes in the service industry then it raises the overall processes of the company’s success. Health and security services, teaching, nursing, and other key services are the main sectors in which the comparison of collusion and competition appears.

The service industries instantly growth of the economy that’s why the overall performance of the business help to take the advanced strategies that determine the better plans and reach the overall growth of the business. Various functions and strategies of the business are used that enhance the progress and raise its key comparisons toward the best practices or policies.

Competition is the process when the services provided by the company work to gain a competitive advantage and determine the overall practices as required in the given areas. Competing firms are the interdisciplinary form that enhances performance and degenerates the best values towards the clear plans and raises the organizational sources and maintains the changes in the particular values.

Comparison through examples of the service sector:

International collusion examples:

In the service sector, the entire difference between collusion and competition appears through real-life examples. The bank loan collusion between RBS and Barclays between the years 2008 to 2010 is a real real-life example of collusion. In the year 2010, OFT found RBS and Barclays guilty of collusion in sharing the price arrangements for the process of loans to the professional line accountants as well as the key lawyers. Sharing the price information is a way to avoid competition among the prices and keep the higher prices. RBS company was found to be £28.59m in the independent form.

The service sector of banking tries to provide the same amount of loans to the customers as they are an integral part of the success of the business. These values and operations determine the best components toward explore the changes and provide the overall practices very well. The RBE and Barclays are guilty of collusion in sharing the key prices that are the same which refers to the strong changes and observing the sustainable practices or key values in the sustainable goals.

Another example of collusion is the price given in air travel by British Airways and Virgin between the years 2004 to 2006. In the year 2007, British Airways was finger over £270 million for illegal price fixing arrangers with the long haul fights of Virgin.

It is the process that examines the better platforms and transforms the best values as deals with the company’s resources. In the service sector, mutual benefits are gained by the companies and this process is known as collusion.

International competition examples:

The real-life example of competition among the service sector businesses is Netflix and YouTube which determine the key participation level of customers. The services offered by Netflix are based on the different packages of the membership and the other one is to get free of cost. YouTube is the largest service-based company that provides video streaming, free courses, and learning opportunities free of cost.

It is a very easy-to-use platform that determines the best plans and maintains collaborative functions. Netflix is one of the top world streaming companies and entertainment providers. In form of comparison, YouTube is the digital platform that enhances the performance of businesses by offering free-of-cost services.

Another example is Subway which is a quick-service restaurant chain based in Milford. It is operated by a Dr. associate as the company was founded in the year 1965 as a super plan. McDonald’s company competes with the subways by adding more services in the fast food chain and targeting the global market to determine the best decisions. Different functions are offered by the key values and observed the clear plans as the competitive thoughts that enhance the strategic thinking.

Theories related to international collusion and competition:

1.     Game Theory of Collusion:

According to the game theory of collusion, the companies set low prices then these firms will make £4m. If these forms collide with the higher prices, then it will make double their profit as the £8m. However, in the process of collusion, the firm undercuts the prices and set low prices which can enhance its level of sales. Firm B is unlikely to see the planning and keep the prices high then this firm setting the low prices.

The optimal outcome for the firm is to appear or collide as the price forces. In the service sector industries, the collision occurs by setting higher prices for both companies as the optimal technique. The service industry determines the best values and encourages the overall values to enhance business growth.

1.     Cross elasticity of demand:

According to the theory of cross elasticity of demand, the two companies compete with each other in terms to raise the demand for the products. The demands of customers depend on the prices of the company. Price is a major factor that increases the progress of the business and examines the collaborative plan.

This theory can be implemented by determining the prices and overall plans for strategic decisions. Selling large quantity low prices enhance the demand of the customers that integrate towards the business values.

To examine the change and set the core prices, the firm’s growth is strong. This theory determines the better change and observed the reliable plans and organizational values. Higher prices of the products mean the demand by the consumers is low. The same concept is applied and vice versa when the prices are kept low to motivate the demands of the customers.

Advantages and disadvantages of international collusion and competition in the service sector:

In the service industry, different advantages affect the performance of the company in extreme values. International collusion and competition among the service sectors have different pros and cons that affect the performance of the businesses.

Advantages of Collusion.	Advantages of Competition.
It helps the declining service sector to raise its profit by fixing the prices.	There is an abundance of services offered by International companies in the competitive market.
For collision, profit is the most significant motive behind the collaboration among the companies. It raises the profit by immoral means.	The prices of these services keep lower for gaining competitive advantages.
International collusion helps businesses to expand their rations and generate business growth by helping to create a digital brand and enhance the existing values of the customers.	The enhancement of choice as well as expansion the career opportunities becomes increase.
Disadvantages of Collusion.	Disadvantages of Competition.
The international market of the service sector will experience control by rising prices as well as the capacity of production. The existing market equilibrium disruption in terms of getting success.	The completion could lower the demand for the services that determine the best decision.
When the production is controlled then rises more demand due to the limited supply. It pushed prices that are not sustainable and crucial for small companies. The focus of the market becomes decreased.	Some workers could lose their jobs due to competition-based pricing as the necessary information.
It demotivates the new firms from their entering by setting fixed prices.	International companies focus on one factor that affects the price or quality that neglects the preferences of the customers.

Future recommendations:

The service sector businesses should compete based on price as well as quality and resolve the collusion effect because it is not sufficient for the global economy. The economy of the countries depends on certain changes that protect the valuable terms and encourage reliable options in detail. The companies should fulfill the demand of the customers in the international market that imitate their experiences and generate higher success as required forms.

The development of the relationship between prices and quality will help international businesses to maintain the best plans and determine overall success. The service industry provides strong platforms for businesses to raise their demand and reduce the operation of fixed prices by adding innovation.

Conclusion:

International collusion and competition are the processes that express the opinions and activities of businesses as strong forms. Different real-life examples are defined to understand the concept of collusion and competition in the service sectors.

The game theory and cross elasticity of demand are the main theories that discussed their comparison. The advantages and disadvantages of collusion and competition also define very well-formed manners. In the end, future recommendations are defined to manage the entire operations.