A Canadian company Cara Operations Limited has a large influence on consumers and their dining needs, but have you ever heard of them? Most likely, you are more familiar with Swiss Chalet, Harvey's, Kelsey's, The Outback Steakhouse, and Montana's. More likely, is that you haven't just heard about these restaurants, but you have probably eaten at one. All of these restaurants are divisions of Cara Operations Limited. Another possible form of business, franchise, might be owned and operated by someone else under the authority of Cara Operations Limited.
A Company with a Vision:
When a customer enters a Harvey's and sits down at their table they probably do not realize that the Montana's across the parking lot is owned by the same company. Cara Operations Limited is a company that has been created with the vision that they are "leaders in the Canadian Food Services". Owning and controlling hundreds of these branded restaurants is enabling Cara to achieve its vision.
History of Cara Operations Limited
Cara Operations Limited began in 1883, but its former name was The Canada Railway News Company Limited. In the early 60's, the name changed to Cara Operations Limited. By the time the new millennium rolled around Cara was Canada's largest food service company. Cara Operations Limited utilized key principles to capitalize on the Canadian market: leadership, teamwork, respect, hospitality, innovation and fun. Cara developed loyalty by providing a service rather than a product.
Competition in a Free Market
A free market ensures that businesses can make a profit, which means the more successful a business is, the more money that they can potentially make. Profits drive a business; without any incentive a business will have a difficult time staying in business.
As a business gains more profits, the more a business can invest in new technology, business growth, paying off debts and market research to make more profits. Profit is the reward to make a business better.
Free Market = Competition
Competition has four major structures: perfect, monopolistic, oligopoly, and monopoly. A perfect competitive market is characterized by a large number of small companies, none of whom have the ability to control the market. Perfect markets require government regulation to restrict growth in order to prevent market dominance.
Monopolistic markets consist of a large number of companies, each having some possibility of market control.
Oligopoly markets have a small number of large companies, each with a large amount of market control.
Finally, monopoly markets are a market where one company controls the entire market (no competition).
The Canadian government insists equal amounts of competition throughout all business entities. The government regulates monopolies and legislates against illegal forms of business; such as price fixing, restrictive measures, and unfair business practices.
Benefits of Competition
Effective businesses develop strategies to be competitive within their market. The most easiest form to compete is to charge less than your competition. If a business decides to charge less than their competition they must become more efficient, use fewer resources, or make better deals with suppliers. Many businesses have departments that research and develop better product designs or techniques to help become more competitive commonly referred to as Research and Development Departments (R&D). Competition in a free market motivates businesses to work better and develop new innovative designs to increase their market share and potential profits.
Why Competition Always Doesn't Work
Improvements in one area can lead to turmoil in another. In the late 1970's, technology was introduced that would revolutionize the home video market but rapidly changing technology in one area can cause havoc in others; not all video rental stores or home owners want to upgrade their inventory. Watch the following video to further explore R&D and technology that didn't make the cut.
Direct and Indirect Competition
Products that are very similar are direct competition. In direct competition consumers must choose among products within the same category. If you wanted to attend a new movie, and one theatre charges $18 for a ticket but another charges $22 you might choose the lower fare. Businesses that compete with each other for your income, such as clothing stores, a pizza shop, or phone carrier are each vying for your discretionary income, these are called indirect competition. Indirect competition are businesses that sell a product or service that are not directly related.
Use the Google classroom to complete the Competition assignment.