Taken as a whole, my suggestion would be that large mutual fund markets are imperfectly competitive. The quality of the product does not seem to be related to the price of the product and the quality-price relationship does not seem to be improving in spite of the large number of suppliers in the market. It’s difficult to determine the quality of the product being sold. Securities are difficult to price because risk is difficult to judge. Both the market and mutual funds are responsible for prices. I believe their main focus would be not only who the comp

From a buyer’s perspective, mutual funds are consumer products, the buyers are usually fragmented (many, different). The buyer doesn’t have any particular influence on the mutual fund or the price of the mutual fund. Investors buy at what the price is, and stick with it as long as they are getting the returns required to meet their personal needs.

From an investor’s perspective, they see a lot of different mutual funds in the mutual fund industry. Other investors are not competing for each other’s business; it’s the mutual funds that are competing for all the small investors business. I would also say that investors fall in the category of monopolistic competition. There are both many buyers, and many sellers in the industry.

In the mutual fund industry, a supplier can play a significant role in supplier power. For instance, if a bank loans large mutual fund firm money to start or expand their organization, they will expect to get their money back with interest. If the firm is profitable, that task of paying back the money will not be a problem. If the firm is not profitable, they could possibly go bankrupt and lose all their clients. The telecommunications industry also plays a supplier role in the mutual fund industry. Without telecommunications, a mutual fund firm can’t conduct their everyday business. In all actuality they could, but they would not be up to speed with society and the rest of the industry. Communications is a large role in everyday transactions, between their clients, banks, and with their competition. These supplies can exert an influence on the producing industry. Without them, firms can’t compete in this market.

There is a large differentiation between the products in the mutual fund industry. The different stocks and bonds a single investor could decide from could almost seem endless. Is the knowledge of the investor perfect? Not always, but it could be. There are small independent investors who know a lot about the mutual fund industry, and there are some that don’t. Some of them know when it’s time to pull their money, and they seem to know where to put it. These investor’s have an incentive to carefully examine the fees and compare funds.

As an investor, competition is always worried about the threat of substitute product. It’s all about the returns for the investor, and if one firm can bring more returns to their clientele, then more and more investors will switch their money to that firm. The end result

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