Competition can be a strong motivator for business success. It is not uncommon for two or three key players to dominate an industry. These players often make it harder for new entrants to come in. Sometimes the rivalry between businesses is so strong that their entire focus is destroying the competition. When this occurs, businesses can fail to consider the threat of newer entrants and even face legal consequences. One of the largest business rivalries is between Coca-Cola and Pepsi. For years, these two players dominated the industry. However, as soda sales began to flatten, competitors emerged to take advantage of new trends. Red Bull tapped into the energy drink market. Red Bull is not known for its good taste. Yet with its focus and branding on extreme sports, Red Bull surpassed Pepsi in brand value. Businesses must not get distracted from the possibility of newer competitors.
Based on this information above, why is competition important in a capitalist economy?
Competition can be a strong motivator for business success. It is not uncommon for two or three key players to dominate an industry. These players often make it harder for new entrants to come in. Sometimes the rivalry between businesses is so strong that their entire focus is destroying the competition. When this occurs, businesses can fail to consider the threat of newer entrants and even face legal consequences. One of the largest business rivalries is between Coca-Cola and Pepsi. For years, these two players dominated the industry. However, as soda sales began to flatten, competitors emerged to take advantage of new trends. Red Bull tapped into the energy drink market. Red Bull is not known for its good taste. Yet with its focus and branding on extreme sports, Red Bull surpassed Pepsi in brand value. Businesses must not get distracted from the possibility of newer competitors.
Based on this information above, why is competition important in a capitalist economy?
