An example of indirect competition.

An example of indirect competition.

• A. Indirect Competition
• B. Direct Competition
• C. Price Competition
• D. Non-price Competition

Answer: (A)

Indirect competition happens when different products or services compete for the same customer need. They aren’t selling the exact same thing, but they meet a similar want, so they vie for the same group of customers. The best choice names this type of rivalry directly, which shows you understand that substitutes can take different forms yet still compete for the same discretionary dollars. For example, going to a movie theater and using a streaming service both satisfy the need for entertainment, even though the offerings are different. The other options describe different dynamics: direct competition is rivals offering the same product, price competition centers on price as the main lever, and non-price competition focuses on factors other than price.

Indirect competition happens when different products or services compete for the same customer need. They aren’t selling the exact same thing, but they meet a similar want, so they vie for the same group of customers. The best choice names this type of rivalry directly, which shows you understand that substitutes can take different forms yet still compete for the same discretionary dollars. For example, going to a movie theater and using a streaming service both satisfy the need for entertainment, even though the offerings are different. The other options describe different dynamics: direct competition is rivals offering the same product, price competition centers on price as the main lever, and non-price competition focuses on factors other than price.