Direct and indirect competition is when one product faces immediate threat of not selling because of another product. For example, iPhone and the Samsung Galaxy S2. A popular video on Youtube was displayed where the iPhone and Samsung were dropped from different heights, and the durability of the Samsung was a lot better. These two products were also similarly rated in terms of capacity, display, etc… Therefore, durability was a significant factor that it was better than the iPhone. This is an example of direct competition because they are both smartphones, who serve the same function (entertainment + communication), therefore pose a threat towards each other.
On the other hand, indirect competition is when another thing which serves quite the same function. A computer would be the indirect competition of the iPhone because it can also allow the user to communicate with someone else through applications such as Skype and iChat.
In class, we made a broadcast to show our knowledge about indirect and direct competition. This has allowed us to learn more about the word “markets” in the guiding question because we then comprehend how the market can be affected by products which are directly and indirectly related to each other. We also learn that specifications that the different products hold can affect the choice of the buyer.
This is also related to Needs and Wants because it allows us to know more about “Wants”. Buyers obviously want the best product available, therefore will look at the product with the best benefits.