Competition Forms

Question 1

What is competition?

Answer 1

When there is more suppliers in the market offering the same product or service. Then we get competition

Question 2

What is an auction?

Answer 2

Sellers offers his product or service to the market/the buyers

Question 3

Mention different type of auctions and how they work?

Answer 3

English auction - begins lowest and then price increases until there is no one offering more
Dutch auction- begins by asking high and then going down in price until someone says “mine”
First price sealed bid- each bidder submits one bid and item is given to the highest bidder
Second price sealed bid- each bidder submits one bid and item is given to the highest bidder but for the second highest price bid

Question 4

What is reservation price ?

Answer 4

If the sellers does not receive desired price, then the product or item will not be sold

Question 5

What is the four steps of auction process?

Answer 5

Searching
Bidding
Buying
Owning

Question 6

What is tenders ?

Answer 6

Sales that use sealed bids that buyers directly send to seller

Question 7

Reverse auction

Answer 7

The buyer invites suppliers/sellers and sets specification on their product that they want. Then the sellers/supplier comes with an offer.

Question 8

Risks of reverse auction?

Answer 8

You can get to little competition between suppliers if there is to many specifications. The larger and more the comprehensive the product, the fewer suppliers there will be)

You can get lot of work if you have to go through to many uninteresting offers

Supplier may not respond if you send to many inquiries if they never revive a contract