Interesting debate I heard today. Essentially there is one large company that pretty much dominates a certain industry. As a result they have a very large infrastructure which pretty much services the entire area. If someone new wants to enter into the market they would pretty much lease lines from them to do so as the cost of building your own infrastructure/network to do so would be outrageous. So of course the main company makes money no matter what.

But the debate was would that be the wisest decision if you were that large company? The way of thinking was what happens if that person who say leased lines from you begins to become so big where they can afford to build their own network? Hence, they can then become a serious contender in dethroning you. So while it may have seemed like easy revenue in the beginning it could come back in a bad way.

It almost reminds me of Google. I remember when they were almost a nobody as one day I suppose companies like Yahoo thought that it was a great idea to use their search engine technology on their site. While I’m sure it helped their visitors find relevant web sites and all which equated to more revenue at the same time they helped to create the juggernaut too I’d say. The debate sounded like a game of chess where you want to make the best moves where you will come out on top either way.

I can easily imagine one getting hit with anti competition complaints too if you are too good in controlling the market. So in some ways you can’t really do much as you would want to bring out the competition. I guess if you are a fortune 500 company of sort then you can’t really try too much to limit the competition as opposed to if this was a small local business. As well if you are in the business of supplying resellers with products then it would make no sense to not want them to do well even if they become so big where they can just cut you off after.

Interesting strategy I saw the other day. Essentially, there was a company that resold a specific type of item that only the carry. As well, they own multiple businesses where while the items they sell in the store are similar, they are all owned by the same parent company. It’s almost like a false sense of choice when it comes to having a choice on who to shop with.

Anyhow, what they would do is mark up one item so ridiculously high in one store where people will think it is such a great deal in the other. For the most part it seems to work too in generating sales. You can’t exactly compare it too well to determine value from a regular consumer point of view since no one else carries the product.

This method kind of requires you to have a lot of resources to pull off too. I know one company that operates about five different divisions all for the sake of creating what looks like competitors. Sure enough they are one of the biggest companies in town too. In some ways it seems so wrong yet semi clever at the same time.

I noticed that there was this store that had a fairly large competitor which always had a sale on a specific date of the week. As a result, what they do is have their own sale the very next day where the intent is to see what its competitor is throwing out there so that they can beat their deals.

It seems like a good idea overall. But in reality it didn’t seem like it really affected the competitors that much from what I saw. Basically, customers still shopped at the stores of their preference as it is challenging to convince people to hold off on their purchases once they see a sale price. I think for things like groceries this is not a very good idea as regardless if people paid more money most people would be too lazy to return these types of items. Therefore, waiting an extra day just means a loss of sale.

Instead of trying to focus on taking a sale for specific items this is more of an opportunity to garner more attention for your business I’d say. Example, if someone offered various items for $50 and you just offered say a limited quantity of the same item for $20 the chances are higher that people will start talking about it. As a result, they will be more anticipated to hold off and see what you have to offer first. That is more effective than say offering the products at like $45 with the mindset that you are going to take all of the other business’s current sales.

Unless the two rivals are on a semi even playing field when it comes to a business presence then that would be a little different.

I read an interesting e-mail today as a person sent me his investment details to show how much money he has earned from a particular item. Essentially, he was interested in seeing how well others have done in comparison. While I guess some may say it is bragging a bit, I say you do need that little itch of friendly competitiveness in order to achieve more.

Usually those type of people are constantly trying to find the smartest ways to maximize their earnings and to do so they try to learn from others as well. This one was pretty impressive as by the looks of it he turned a mid four figure investment into a decent five figure one in the span of one year. I think I will create a list to see how he compares to others in the same category once he gives me the visual proof where I can post it up for everyone to see.

So today there was an announcement that there is going to be another company entering the wireless service business here which in hence creates more competition. As you may have expected, the proposed service rates look very attractive compared to what the market currently offers.

It is kind of amazing at how fast some of the other companies are already dropping its prices in anticipation for this. I also read that one company was actually restructuring its staff and finances to enable it to better compete with the changes too. Even if you have no intention of switching you can easily use this as leverage too to re-negotiate your service contracts in order to get a better deal.
Wonder how much I can save as a result of this.