When Does It Stop Even Being IT: Buyers vs Doers
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@Mario-Jakovina said in When Does It Stop Even Being IT: Buyers vs Doers:
My point is - I don't see many companies in non-competitive environment
I see absolutely tons. Mostly because the market is small. I'll give an example...
Crappy restaurant opens in a town of 1,000 residents. It's not horrible, just not very good. Prices are a little high, service slow, a few food items are good, most are blah. They survive because people want a place to eat and they are it.
No competition. Logically a competing restaurant will just open up and kill them off, right? Well, no. Because the market doesn't grow with the new restaurant. So someone looking to open a new restaurant says "even if I make a better restaurant I have to compete against an established restaurant with less debt... the potential market for the second restaurant is smaller even if they do better."
The second restaurant has a lot of fears... can they really do better than the first one? If they cost less, they have fewer profits to use to compete. If they make better food or have better service, that only causes a certain percentage of people to switch to them. Most people will split their time to some degree between the two, lowering the market share for both. Presumably the established company has less debt and is already up and running and can improve their food, service, and prices before the new restaurant opens - potentially making it impossible to compete, then they can go back once the new one fails. Did the first restaurant get the best choice of real estate and the new one just the second best location?
It's actually extremely common in the SMB world for companies to remain without competition because it's often not a market where there is much to any value to competing where someone is already there. Established companies have typically deep pockets to throw at making new start ups in their space fail.
