Footlocker Case

Footlocker

Rodney Espinoza

ECO/365

December 17, 2012

Ashraf Zaki

Footlocker

Footlocker is a firm that produces large amounts of products for sell to households and businesses. The market that Footlocker competes in can be seen as a Perfectly Competitive Market. The Perfectly Competitive Market is defined as one in which economic forces operate unimpeded or having many smaller firms (ch14). The Perfectly Competitive Market has six requirements: 1 Both buyers and sellers are price takers, 2 The number of firms is large, 3 There are no barriers to entry, 4 The firms products are identical, 5 There is complete information, and 6 Firms are profit maximizers (ch14). Footlocker meets these six requirements and this is why the Perfectly Competitive Market was decided upon. There are two ways in economics the concept of competition are used: 1 Competition as a process is a rivalry among firms, and 2 Competition as the perfectly competitive market structure (ch14). The buyers and sellers at Footlocker retail stores are both price takers. The consumers at Footlocker take the market price "as is" which means they accept the prices that are offered in each store or outlet centers. The number of firms footlocker competes with is large consisting of Finish Line, Kids Footlocker, Lady Footlocker, and Champs Sports to name a few. There are no barriers to entry in the market, which means that there are no social, political, or economic impediments that prevent any firms to enter the same market as Footlocker. The retail store Footlocker does not have any special patents that prevent other firms from producing the same goods as them. Footlocker has the same technology benefits as other firms competing in the same market. Footlocker, Champs Sports, Lady Footlocker, and Kids Footlocker all share identical products they sell to households and businesses. The shoes and clothing at each store are identical in prices and name brands. Footlocker has complete information between them and their consumers about the current market. What this means is that information about the products, prices, and available technology are all known to the market. If the price of a certain brand of shoe goes on sale the available market will instantly know. Footlocker does this by letting customers know there is a shoe sale with ads in newspapers and commercials on TV. The advancement in technology makes the internet one of the most used forms of advertising. With more than 3,000 retail stores in 20 different countries Footlocker is a great fit to the Perfectly Competitive Market because they are made to compete (Hoover.com).

Competitive strategies are important when wanting to get ahead of the competition. Competitive strategies are how businesses compete and how they evaluate their strengths and weaknesses against its competitors (yourdictionary.com). Because Footlocker has many firms to compete with one competitive strategy that could be used is location, location, location. This, as a strategy against the other retail stores could be a great advantage for Footlocker. This is because