Thursday 12 November 2015

Is it good or bad to have a competitor?

Firms hate competitions, hate having any competitors. The market generally believes that a firm will lose profits when the level of competition increases. This is not necessary to be true. With a competitor, a firm has to work harder and be more creative in order to stay in the game. I want to say without competitions, Apple would never have become this successful. Many people think Steve Jobs played an important role in the rise of Apple Empire. However, at the time of Steve Jobs rejoined the company, Apple was facing competitions from Microsoft and other computer companies and it seemed that Apple had lost the fight against the PC world. Yes, Steve Jobs made Apple become successful. But without the competitions Apple faced, Steve Jobs would have never come back to Apple. In addition, Microsoft was once the most successful company in the world, its Windows dominated all other computer OSes. Microsoft earned a good amount of profits from its Windows, because it lacked competitions, it had few incentives to be creative and develop new products. These years, we saw the sales in Windows-installed computers fall and its smartphone OS was a late enter of the industry. From these two examples, I want to say that competitions give firms a chance to explore their potentials and those with greater potentials can become more successful than if there is no competition.

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