Building Block Model under European Union Competition Law

Competition suggests that protective and promoting honest competition apply. Limiting production, markets, or technical development to the bias of consumers. European competition law is the competition law in use within the European Union. It promotes the maintenance of competition within the European Single Market by regulating anti-competitive conduct by companies to ensure that they do not create cartels and monopolies that would damage the interests of society.


Competition law is extraordinarily advanced and has become more and more necessary to firms conducting business activities, particularly within the global organization (EUROPEAN UNION). The supply of laws governing competition for the EUROPEAN UNION is embodied within the pact on global organization, as amended by the pact of the Dutch capital, signed on Oct. 2, 1997

Competition Law of European Union

Article eighty one of the pact governs agreements between, or practices of, 2 or additional parties acting along that have as their object or impact the restriction of competition within the EUROPEAN UNION. Article eighty-two governs abusive business conduct of one party in a very dominant market position.
EUROPEAN UNION competition laws apply wherever the conduct, agreement, conjunct apply or abuse of dominant position is probably going to have an effect on trade between 2 or additional member countries. If there’s no chance of an impact on trade between member states, then the agreement or conduct is subject solely to national competition laws.

* Directly or indirectly imposing unfair purchase or merchandising costs or different unfair mercantilism conditions;

* Limiting production, markets, or technical development to the bias of consumers;

* Applying dissimilar conditions to equivalent transactions with different mercantilism parties, thereby putting them at a competitive disadvantage; or Concluding contracts subject to acceptance by the opposite parties of supplementary obligations that, by their nature or in keeping with business usage, don’t have any reference to the topic of such contracts.

EUROPEAN UNION’s rules on competition are designed to confirm honest and equal conditions for businesses, whereas going away house for innovation, unified standards, and therefore the development of tiny businesses.
The EUROPEAN UNION Commission monitors and investigates anti-competition practices, mergers, and state aid to confirm A level enjoying field for EUROPEAN UNION businesses, whereas guaranteeing selection and honest valuation for customers.

European Union Competition Cases

The Commission’s powers to research and halt violations of EUROPEAN UNION competition rules are subject to a variety of internal checks and balances, also as full review by the EUROPEAN UNION Courts.
The EUROPEAN UNION is additionally at the forefront of international cooperation within the competition field to push and propose best apply. it was an initiation member of the International competition network (ICN), and partners with the world and national bodies to assess potential competition breaches.
European Union Competition Law is that the competition law in use inside the European Union. It promotes the upkeep of competition inside the European UnionSingle Market by control anti-competitive conduct by firms to confirm that they are doing not produce cartels and monopolies that may injury the interests of society.

Leading ECJ cases on competition law include Consten & Grundig v Commission and United Brands v Commission.

European Union competition law these days derives principally from articles a hundred and one to 109 of the pact on the Functioning of the EU (EUROPEAN UNION), besides as a series of laws and Directives. Four main policy areas include:

* Cartels, or management of collusion and different anti-competitive practices, beneath article a hundred and one EUROPEAN UNION.
* Market dominance, or preventing the abuse of firms’ dominant market positions beneath article 102 EUROPEAN UNION.
* Mergers, management of planned mergers, acquisitions, and joint ventures involving firms that have a definite, outlined quantity of turnover within the EUROPEAN UNION, in keeping with the EUROPEAN UNION merger law.
[i]* State aid[ii], management of direct and indirect aid given by Member States of the EUROPEAN UNION to firms beneath EUROPEAN UNION article 107.

Scope of Competition Law

The logic of competition is most applicable for personal enterprise, the core of EUROPEAN UNION competition regulation targets profit creating companies. This said, regulation essentially extends any and within the EUROPEAN UNION, each article a hundred and one and 102 use the ambiguous construct of “undertaking” to delimit competition law’s reach.

EUROPEAN UNION competition law is predicated on the articles a hundred and one to 109 of the pact of on the functioning of the EUROPEAN UNION and numerous laws and directives[iii].

The Building Block Model

The building block model is so-called because the allowed revenue [iv]of the regulated firm is equal to the sum of underlying components or building blocks consisting of the return on capital, the return of capital[v] , the operating expenditure[vi], and various other components such as taxes and incentive mechanisms.

The Building Block model appearance at 3 areas of performance:

  • Dimensions
  • Standards
  • Rewards.
    Dimensions Explained

    Companies vie across a variety of dimensions besides money performance. The Building Block model considers this and describes 2 classes of dimensions:

 ‘Results’ and ‘Determinants.’
‘Results’ are the result of selections and actions taken by management within the past. These are captured beneath the primary 2 dimensions of the model, money performance, and fight.
‘Determinants’ talk to the modern dimensions of the model: what arras of future performance are most vital for an organization to realize positive money and competitive results? Quality, innovation, flexibility, and resource utilization are the determinants of future success.
Dimensions at Smart Courier

As a listed company, the management of Smart Courier is going to be curious about activity money success—is it delivering the correct profits and returns for its shareholders? the fight is additionally vital to living as new competitors are getting into the market in Max land—is Smart Courier maintaining or losing market share?


Smart Courier’s managers and employees got to specialize in the size of performance which will confirm positive money and competitive results. for instance, on-time deliveries can cause client loyalty. This falls beneath the quality of service. The company’s varied product vary ought to meet the wants of various client segments; this can be an associate example of the flexibility of service. Flexibility and quality of service ought to successively drive positive money results, for instance, higher sales revenue.
Innovation is additionally necessary to Smart Courier because it is an investment in new technology and up processes with its Smartphone app. Resource activity is vital to its money success as economical use of delivery vehicles, employees, and money resources can cut back prices and improve profitableness. In different words, innovation and resource activity are driving money success (higher profits) and fight (maintaining market share).

Standards Explained

After the associate organization’s dimensions are understood, standards may be set. These are going to be the benchmarks, or targets, directly connected to performance metrics beneath headings for every dimension. There are 3 aspects to contemplate in setting standards:
* United Nations agency is chargeable for achieving the quality (ownership)?
* What level are the standards set at (achievability)?
* will we tend to use the standards for a good appraisal across the corporate (equity)?

These 3 criteria are necessary. If it’s unclear to whom targets are appointed, managers and employees won’t have answerability, and performance management can fail. If personal targets are unrealizable, folks won’t work tougher to realize their goals and there’ll be very little motivation. If the appraisal isn’t honest and clear, worker morale can suffer.
Standards at Smart Courier
Based on the size higher than, we will recommend standards of performance for Smart Courier:

Financial Performance

Growth in sales, income margin, and come back on investment are potential targets for regional managers. for instance, mounted targets may be set, like V-E Day annual growth in sales or a target ROI of 14 July. Or, Smart Courier may use a league table approach by ranking the regions in keeping with these standards so appreciated managers consequently.

[vii]With new players in the advertising is very important for Smart Courier to live in this space of external performance. It will set absolute market share as a typical for activity fight by dividing Smart Courier’s revenue by the whole revenue of the business in Maxland. A target for regional managers may be to take care of market share as competitive competition is increasing within the business.

As a service organization, Smart Courier must deliver the quality of service to retain its client base. It will set targets for traveler agents like ninety-eight on-time delivery, or for center representatives average time to require associate order of three minutes. it’ll be necessary to confirm that these targets are each honest and doable to confirm workers are driven.

Resource [viii]Activity
Smart Courier will live resource activity by victimization potency standards like average time per delivery or an average variety of deliveries per day. However, equity ought to be thought of here, as urban regions may doubtless out-perform rural regions as urban customers are going to be clustered nearer along.

The flexibility of service and innovation
[ix]The flexibility of service may be measured with targets like ninetieth of orders regular to customers’ request and Innovation may be measured optimistically of shoppers victimization the Smartphone app.

Rewards Explained
The last part of the model appearance at the reward structure of the organization and is the link to time unit systems. Do compensation packages within the company lead folks to realize the standards of performance that are embarked on above? This part of the model has 3 aspects:
* is that the system apprehensible to any or all workers (clarity)?
* can the system drive workers to realize their objectives (motivation)?
* Do workers have management over their areas of responsibility (controllability)?

The reward[x] system ought to be clearly understood by all employees: this implies unambiguous performance appraisal and bonus triggers. Rewards ought to be sufficiently fascinating so that workers are motivated to figure onerous towards gaining them. Finally, if workers are assessed against factors out of their management, they’ll lose interest in operating towards their rewards.

Rewards at Smart Courier
It looks like Smart Courier has a good reward system. The compensation package covers a variety of monetary and non-financial rewards and advantages, that in all probability contribute to the motivation of workers by meeting their different desires. for instance, new oldsters are going to be driven by the kid care facilities, different employees could also be driven by the versatile workplace arrangements. It conjointly seems that rewards are performance primarily based (for example, ‘goal primarily based incentives[xi]‘) which can cause increased motivation.


Competition suggests that protective and promoting honest competition apply. Limiting production, markets, or technical development to the bias of consumers. Like alternative trendy performance measuring frameworks, the Building Block model connects Associate in Nursing organization’s strategic objectives to a spread of progressive, non-financial performance measures. wherever the Building Block Model differs, however, is that additionally considers reward systems and aims to form a framework of clearly understood and communicated individual metrics that aligns individual performance targets with structure objectives.

Frequently Asked Question(FAQ)

  • Q.1  What is competition law?
  • Q.2  Why is European union competition law important for the market?
  • Q.3  what is the building block model?
  • Q.4 What is the design made by the euro pen union competition law for the bitterness of market?        


  • Jones, Alison, and Sufrin, Brenda (2007) EC Competition Law: Text, Cases and Materials, Oxford University Press, 3rd Ed. ISBN 978-0-19-929904-1
  • Monti, Giorgio (2007) EC Competition Law, Cambridge University Press, ISBN 0-521-70075-2
  • Wilberforce, Richard (1966) The Law of Restrictive Practices and Monopolies, Sweet and Maxwell
  • Whish, Richard (2008) Competition Law, 6th Ed. Oxford University Press, ISBN 978-0-19-928938-7
  • Tobler, Christa; Beglinger, Jacques; Wessel Geursen (2011), Essential EU Competition Law in Charts, Budapest: HVG-ORAC / E.M.Meijers Institute of Legal Studies, Leiden University. ISBN 978-963-258-118-7. Visualization of EU Competition law,
  • Szyszczak (2007) The Regulation of the State in Competitive Markets in the EU
  • Geradin (Ed) (2000) The Liberalisation of State Monopolies in the European Union and Beyond
  • Quigley & Collins (2007) EC State Aid Law
  • Biondi et al. (2003) The Law of State Aids in the European union

  • [i] European union merger law is a part of the law of the European Union. It is charged with regulating mergers between two or more entities in a corporate structure.
  • [ii] State aid is a European Union is the name given to a subsidy or any other aid provided by a government that distorts competition.
  • [iii] An official or authoritative instruction.
  • [iv] Income, especially when an organization and substantial nature
  • [v] depreciation
  • [vi] The amount of money spent
  • [vii] Better than others of a comparable nature.
  • [viii] A source of help or information.
  • [ix] A new method, ideas, product, etc
  • [x] A thing given in recognition of service,  efforts, or achievement.
  • [xi] A thing that motivates or encourages someone to do something.

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