The market is referred as the group of organizations or consumers that have an interest in certain product either from supply or demand side of it. "The definition of the relevant market is an important initial step in establishing whether a particular firm qualifies as dominant" (Neuhoff: 2006:P 108) Thus the main aim of relevant market definition when firms wants to merge is to have a merger control by trying to identify and prevent to have transactions that will create market power or dominance. The relevant market definition is regarded as a tool that assists in identifying and defining the parameters of competition between firms. "The objective of defining a market in both its product and geographic dimension is to identify those actual competitors of the undertakings involved that are capable of constraining their behavior and preventing them from behaving independently of an effective competitive pressure".
[...] According to the market shares nationally for general sports equipment and outdoor equipment if the acquisition was to be approved it, would result in the merger dominating the markets and lessening competition, the merged company would dominate the market and eventually control prices. It was also indicated in the report that post merger share of the merged entity in the equipment markets when calculated for both parties , it would be even though in the report there was a mention of barriers to entry for these items are low the high market share was still categorizing the merger as dominant Geographical Market The market for both companies is classified as national, and if the merger is allowed to go through will lessen the competition as the merging parties follow a national pricing policy, and it was mentioned that the managers in chain stores at different towns or provinces have no control on setting prices. [...]
[...] The opposition will still have to import certain ingredients from their “mother-companies” abroad which will favor the manufacturer in South Africa who do not have those expenses Geographic market definition If the merged firm should raise its prices, it won't lose too much of its business, because as the hypothetical monopolist, people will still feel the for the product. Other suppliers will not enter into the market at such a high rate to make the increased price unprofitable, because of the dominant position of the merged firm as a monopolist. [...]
[...] “Depending on who was included in the market, the combined market share would range from 47% to "all of which are alarmingly high and reflect a high degree of concentration", said the Tribunal (Competition body block 2006). The merging parties unsuccessfully disputed the tribunal's definition of the relevant market as national market for general retailing of sport and outdoor equipment”. The tribunal viewed the competition between the two parties as having benefited the consumers. They that the consumer would have very few credible national retailers to whom they could turn to. [...]
[...] These competitors definitely complete in the same product market, because it have the same customer base, the same market and the same functionality. Before the merger, both companies had to use another company to give more value in its value chain CandyCola had to use a company that can put carbon dioxide in their cola and the carbonated-beverage firm had to acquire cola from another company before they could carbonate it. Now after the merger, the company can manufacture carbonated cola inside itself, which will lead to a saving which makes them a company that suddenly can give competition to other carbonated cola companies like Coke and Pepsi all close substitutes. [...]
[...] In this regard it will be any other beverages manufacturer who can supply any other product with cola ingredients as an alternative of the Candy Cola Definition of the relevant market To define the relative market, there should be looked into the relevant product, relevant geographic and relevant functional market. The competition in this case is mainly inter-brand competition because of the type of main competitors in the market and price elasticity between distributors Product market definition 1 Demand-side substitutability After merging, the company will still be able to manufacture cola beverages, but now also carbonated beverages and carbonated cola. There will still be a demand for all three of these products, with competitors in each of the fields. [...]
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