competition is actually good

Topics: Marketing, Consultative selling, Income Pages: 3 (1020 words) Published: January 27, 2014
With the goal being established this way I chose to keep his sections' names to avoid citing him and therefor duplicating Your mnemonic load.

'It drives down prices'
As a matter of fact, the low quality and the lack of interoperability are not directly the costs of competition. Both factors are just the offsprings of commercial nature of vendors: as vendor has to sell his devices to keep himself living, he has to artificially lower their product's quality just to keep selling them.

Obviously the only reason of existence of each and every vendor is to get revenue, so the income dictates all the rest. Again obvious is the fact, that the income could be calculated as "(price - costs) * customer base / period of use": if period of use is bigger, the price has to be driven up to keep the income. At the same time, the decision to buy a computer is dictated by financial reasons: $500 PC will be a lot more popular then much better $1000 PC (as evidently follows from computer history, by the way). Therefor any vendor is interested in selling his product as cheap as possible to have more customers, and therefore he has to lower the term of use, that is done the two ways: drawing as much updates as possible (indirectly lowering the quality due to smaller period of testing and development) and directly lowering the quality of product to make the consumer buy his new product several years/months/days earlier.

The role of competition here is to restrain this factor: noticing competitor out there the vendor is forced to keep his products' quality as close to competitors' as possible to avoid bad publicity and subsequent reducement of customers base.

'It gives consumers more choice'
Effectively the choice has the value of its own. As a resident of ex-USSR I know what is the customer appliances with no choice: most customer appliances of the USSR were so bad that getting even the cheapest 'import' appliances was an unbelievable luck. The position 'choice is...
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