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"The presence of a competitor is always beneficial to a company. Competition forces a company to change itself in ways that improve its practices."

 

Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations, or reading.The author of the passage states that the presence of the competitor is always beneficial to a company because its presence forces the company to improve practices. I disagree with the idea presented because the competition may not be always beneficial to the company.

 

 

It is true that the competition forces a company to improve its practices but it is not always beneficial for the company. For example- a soap producing company which is facing severe competition is forced to improve its product by improving input quality and packaging, but this improvement will also raise the cost incurred by the company that will eventually reduce the profit margin. Reduced profit margin is certainly not beneficial for the company.

 

Moreover presence of the competition reduces the demand for the company's product by offering close substitutes to the consumers. When Ford Motors had a monopoly over the market with its Model-T ford was more successful in the market with a cent percent market share but with time when other companies entered the business, they started hurting the Ford's business and their entry to the automobile business was not beneficial for Ford.

 

Some people will argue that competition improves the practices for the company by leaving no other option, they are true to some extent but improvement in the practices alone is not sufficient for a company to be successful.

 

Overall, absence of competition provides the company an opportunity to cater the whole market for its product which is "the ideal" and the most beneficial situation for any company and improvement in the practices of any company cannot be seen as benefit to the company in isolation.