Competition: A good or bad thing?

I haven't started a thread in a while, but was thinking about this a bit while discussing other related topics (at least, in my odd world).

Does competition enhance or detract from quality of learning or quality in business? Why so?

Regards,

Kevin

Hi Kevin

Nothing deep here. My experience is that competition inhibits Quality as I know it. While you may want to deliver the best product and strive to be better overall in your business, the competition always seems to be used against you by the Customer, citing cheaper and faster. Maybe it's the standard ploy by Purchasing geeks, but who can afford to call their bluff? Unless, you can afford to lose the work. Just my take on it.

PS Nice to see you came out from under the desk!

but isn't that part of it

energy said

the competition always seems to be used against you by the Customer, citing cheaper and faster

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With all things being equal in the reliablity area, aren't you going to go for the cheaper, faster model?

In new markets, competition forces quality to drop. But once the market matures, competition can only drive quality up.

JMHO,
CarolX

While they may want it faster and cheaper they also need to remember they are getting what they pay for. Company A may get it to the faster and cheaper than Company B but it may end up costing them in the long run due to the quality or should I say lack of quality product. Which will probably make them think next time they need to place an order. JMT

If it weren't for the competition of a world market, that really hit home in the US in the mid-70's, we would still be driving cars that weighed 2-3 tons, got 10-15 mpg, required a "tune-up" every 3-10k miles, rode on tires that typically lasted 15-20k miles, and overall the vehicle would be guaranteed against "rust-thru" for about a minute.

From a seller's perspective competition may appear to be a driver towards cheap, low quality, product. But I choose to believe that this is based on the typical manufacturer's reaction to competition. Afterall, doesn't Mercedes-Benz still compete in the auto market? Have they "reduced" the quality and price of their product?

In-fact the Japanese had to develop up-market product lines (i.e. Lexus, Infinity, Acura) with increased quality and price to compete with MB. Which has lead to an improved MB product as well.

Increased competition can (and often does) increase the diversity of market (i.e. the market ends up with a greater variety/selection of product). There will be those that choose to compete at the low-end of the market (lower price with perhaps marginally better quality, and/or more content, than their competitors), and those that choose to compete at the high-end with significantly increased quality and content at a greater price.

Additionally, product breakthroughs (advanced technology, quantum leaps in design, etc.) come from obscure sources more often than from the market leaders. Why didn't the development of the PC come from IBM, instead of a man in a garage? Because when a grounded business is good at what it does, it has a tendency to continue doing what it does well - instead of seeking out new markets (3M is typically looked upon as an exception to this norm).

To sum up - Competition can create new markets/technologies and can lead to increased variety in products (products for the masses, as well as for the elite).

Where are the negatives?

I my experience, it depends on the circumstances.

For instance, the company I work for has lost business based on price alone. Then, when our esteemed competitor shut down their plant twice due to missed shipments, they suddenly started ordering from us again. If it was up to me, it would have been at list, but not my call.

However, as has been previously noted, in the rush to get business, sometimes corners can be cut. It takes someone who really knows the customer's application to make the call rationally.

Craig

I think that in MOST cases it improves quality from a big-picture view. I hate competition in my particular business, it makes my life harder, my profits dwindle, my work harder.

But as a consumer, competition is THE thing! I love it. Remember vinyl records? Then 8-tracks, then cassettes, then CD's? The quality of the sound got better and better. Almost everything else is the same, from computers to cars. Without competition quality and innovation stagnates in the long term. JMO.

I LOVE competition! Only through competition do I have the "real" motivation to improve. Having said that...............

What destroys quality (and for that matter true competition) is when buyers have no idea what they are buying. Some "bean counter" somewhere is buying stuff they know nothing about but the price. I say let the user do the buying. He/she knows best what they are looking for and can make the "best" decision. Let the bean counters pay for it, but not decide on what to buy from whom.

MNSHO

Competition is a beautiful thing. You can learn all kinds of things by studying your competition. I call it the "use your friends wisely" technique.

Originally posted by Mike S.
---X--- I hate competition in my particular business, it makes my life harder, my profits dwindle, my work harder.

But as a consumer, competition is THE thing! I love it. ---X---Without competition quality and innovation stagnates in the long term. JMO.

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Yes! That was very well said Mike...

We all hate it when our competitors play rough with us... But: We need the competition to keep improving... Stagnation is the alternative, and we don't want that, now do we?

There is undisputable evidence telling us what happens when the urge to improve is absent: Have a look at how the old eastern block worked out...

/Claes