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What is a Level Playing Field?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 02 November 2016
  • Copyright Protected:
    2003-2016
    Conjecture Corporation
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In the business world, a level playing field is a term used to describe a situation in which fairness and an equal opportunity to advance is afforded to all parties involved in a given business transaction. This is often accomplished by establishing a set of ground rules that all parties must abide by in order to participate in that transaction. This type of fairness concept has the goal of encouraging free trade, as it allows smaller and newer companies to compete with larger and more established companies when attempting to earn the business of consumers.

One example of establishing a level playing field inolves inviting qualified companies to submit proposals as part of the process of earning business. A consumer who wishes to contract with a vendor to supply specific goods or services will send out requests for proposals to a wide variety of potential suppliers. Typically, each participant in the proposal process must provide a response by a certain date. At that point, all the proposals received are considered and compared, and the company offering the best overall terms is chosen, and a contract is established between the two entities.

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With the proposal process, the focus is on how well each company seeking the business can meet the needs of the customer. This means that while one participant may possess a great deal of name recognition, a smaller company that can provide the desired products and also offers other, more favorable, terms has an equally good chance of being selected. A great deal depends on how well each of the respondents to the request for proposal presents their offerings, and what types of evidence they can provide to back up those presentations.

Consumers benefit from the level playing field, because this approach makes it possible to be exposed to vendors and suppliers that they may not know exist. This can be especially important when one or two well-known companies dominate a given market. Rather than feeling there are only those two options to meet needs and wants, the consumer is able to consider several different providers and make a more informed decision of who to do business with over the long-term.

At the same time, a level playing field is a positive situation for all vendors and suppliers. By encouraging active participation by a wider number of companies, competition is increased. This motivates each company within an industry to be constantly thinking of new and fresh ways to present themselves to potential customers, encourages the process of research and development of new products, and generally prevents those companies from developing the mindset that they are the only players on the block and therefore have to do nothing to earn customer trust and respect. As a result, companies that compete on a level playing field are more vibrant, more responsive to customers, and have a better chance of remaining in business for many years to come.

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