Finding out how they attract customers, what range of customers each store attracts and therefore identifying the proportion of the market held by each store. Background to Llandrindod Wells. Llandrindod Wells is a town situated in Powys in mid Wales; it has a population of around 8,000 people. The main industry in Llandrindod Wells is farming and agriculture in the primary sector. There are many farms in and around Llandrindod Wells ranging from arable farming to pasture farming with a mixture o the two. In the secondary sector or manufacturing industry of the towns economy, there are three main factories;
1. Seton And Derwoods, office supplies manufacturer. 2. Mid Wales Yarn, ropes yarn etc manufacturers. 3. The Honey Factory, furniture manufacturers. Theres also an industrial estate in Llandrindod wells which manufactures a wide range of products from clothes to flower pots, the secondary industries provide the majority of jobs for the people of Llandrindod Wells, In the centre of town there are a few shops, mostly self owned with some national companies such as Boots and Somerfield, theres a large tertiary industry in Llandrindod Wells, as Powys County Council has its County Hall there.
There are also three schools, two primary schools and one high school, Llandrindod Wells High school, theres also a hospital many pubs and restaurants, newsagents, take away restaurants, chip shops, hair dressers and gift shops, most of the shops are located in Middleton Street, the main street in the town for shops and services. Also located in Middleton Street are the main saving institutes in the town, these are two building societies, three banks and a post office. Tourism is a main factor in the towns economy; the town was a Victorian spa town and has always had visitors.
To encourage this each year a Victorian Festival is held to celebrate the heritage of the town and this attracts a lot of visitors. Other annual events held include the drama festival in May, the Yule Tide Festival in December and the old time music hall, which runs at the theatre from May to September every year. Llandrindod Wells is a busy town despite its small population, this is as people from surrounding villages come to Llandrindod Wells to buy goods and services, this is good for the economy and is why small businesses can thrive in Llandrindod Wells. Competition. The meaning of COMPETITION,
Competition and competitiveness are words that are frequently heard on the lips of politicians today. Competition is felt by many to lead to greater efficiency. Therefore, the more competition there is the better. But what does competition mean? Is it really true that greater competition leads to greater efficiency? If diseconomies of scale resulted for instance, because the two sets of management failed to work well together or as managers from one firm were appointed to positions in the other firm, despite knowing little about the other firms business. The size of firms. Why are some firms small and some firms large?
Reasons for the existence of large firms. Large firms enjoy many advantages over small firms. They may enjoy economies of scale. Lower costs may mean lower prices and increased competitiveness. Large firms may find it not only cheaper to obtain loans (a financial economy of scale), but also easier to obtain credit and new equity capital than smaller firms. They find it much easier to expand than smaller firms. For these reasons, one would expect to see large firms growing at the expense of small firms. Large firms should be much more competitive than smaller firms and should therefore force smaller firms out of the market.
This has happened to some extent. Reasons for the existence of small firms. Small firms continue to exist for a number of reasons. First, there is a ready supply for entrepreneurs who want to work for themselves, who see a gap in the market and are willing to risk their money and time in a venture. Second, many markets are too small to accommodate large firms. Many markets are localised, perhaps as it is not possible to transport goods cheaply over long distances or because they are special tastes in the local market. Where market demand is small, small firms tend to predominate. Third, small firms may be more flexible than large firms.
They may be willing to supply highly specialised products in small quantities to larger businesses. Large businesses like the speed, flexibility and cheapness of this and buy from small firms. Forth, small firms can often pay workers less than larger firms. Unions tend to be weak and theres a history of low pay in small businesses. This helps reduce costs and allows small businesses to compete. Fifth, in some industries, optimum production (where the average cost of production is lowest) is achieved at very low levels of output. This is true of many personal services, such as hairdressing.
Without the advantages of lower costs due to economies of scale, there is no reason for firms to grow and out compete smaller firms. Lastly, small firms in some industries have combined to share costs such as advertising, research and development. Examples of this are the Spar and Wavy Line chains of independent shops, which pool advertising and other services. Here small businesses can enjoy greater economies of scale than would otherwise be the case. So small firms will continue to exist, but if past trends are anything to go by, they will produce less a proportion of total output over time.