Who Fears Competition?

Column for week of March 17, 2014                          

     Most people realise that if there is only one store to
choose it may not provide the best merchandise or the best
prices.  Why are customers usually better served by two stores
than by one?

     If the second store wants customers, it must serve them
better than the first store.  Why would customers even try the
second store unless they believed it might be better?  If it didn't
prove to provide better service, Why would the customers stay?

     Each customer sets his own standards for what makes
service better.  The better service may be lower prices, better
merchandise, greater variety of merchandise, more convenient
location, prompter service, or a whole host of other things.

     The customers decide which stores serve them best and
patronize them.  It is left up to each store to figure out how the
customers prefer to be served and provide that service.  The
customers' choices are final.

     Those customers with a choice will impose the death
penalty on any store, or other enterprise, which doesn't please
them enough.  Not all customers find the same things pleasing. 
Thus, businesses providing different types of service can coexist
and prosper.  Any enterprise that fails to please enough
customers to keep the cash registers ringing suffers the death
penalty.

     Some people believe that businesses like competition. 
Most businesses don't.  What would you prefer, owning the only
store in town, or having to compete with six other stores? 
Unless you believed you could efficiently please the customers
better than the other stores, most likely you would prefer to have
the only store in town.

     Many people in cities prefer to buy food from food
trucks.  The owners of brick and mortar restaurants don't like
competition from food trucks.  The restaurant owners get the
cities to pass ordinances restricting food trucks.  Often they are
prohibited from parking near a restaurant.  The restrictions may
make it nearly impossible for food trucks to operate.

     This denies the customers the service they prefer.  It
enables restaurants to keep customers who prefer the service
from the trucks.  Like most laws restricting competition, the
restrictions on food trucks protect the established well-connected
businesses from competition from new businesses without
political clout.

     Only enterprises that have confidence in their ability to
please customers want to compete.  Old, stale enterprises fear
competition and seek government protection against it.  They
want to keep their customers without having to please them.

     When enterprises face open competition little more is
needed to make the enterprises accountable to their customers. 
When customers have information about the alternatives
available and are free to choose, the enterprises must please the
customers, or else.  The "or else" is that death penalty.  A
morass of laws and legions of enforcers are totally unnecessary. 
Informed customers free to choose are their own enforcers.

     The fear of competition infects all enterprises, not just
businesses.  Most government enterprises are monopolies, or
close to it.  The revenue keeps flowing even if almost everyone
is displeased with the service.

     When you hear service providers railing against
competition, you can be certain that those providers fear that
they can't please customers who are free to choose an
alternative.  Government school administrators, teachers and
unions who rail against choice and competition are screaming at
the top of their voices that they fear that they can't please
customers who have choices.

     They fear that others will take away the customers by
providing better service.  When they have no confidence in their
ability to serve and please us, Why should we have confidence
in them?  Why should we consent to remain their captive
customers with no choice but them?

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum