Tuesday, 10 July 2007

Monopolies







Monopolies are not bad to consumers. If they were then they would not exist.

Monopolies form because a lot of people want goods and services from it. As soon as they misuse their power, competition will arise and consumers will take their money somewhere else.

If you look trough our recent history, companies that was once thought of as indestructible does not really matter today. A quick example I can think of now is Sears.

The problem with monopolies only arrive if the necessary regulation to promote competition is not in place.

So perhaps to all those people who protest against big companies should rather start to inform the general public a bit more about the problem that some of the big companies cause so that they would rather take their money to another place and thus forcing the large company to change their practices to stay relevant.

Eg. Groups of activists could inform regular shoppers about the benefits of buying goods that was produced locally rather than forcing the big companies to buy more domestically produced goods.
The company is merely providing what the consumers want, to change the whole shopping pattern it would need to happen at the consumer. Companies will adapt to provide what the consumer wants or else they will just disappear from the radar.

If consumers starts to buy more lets say organic goods or fair trade goods the companies will stock more of them, but it is unreasonable to force a company to stock goods that consumers will not buy. The additional costs of holding this product will just be passed on to the consumer by a rise in the prices of other goods and services provided by the company.

So perhaps if consumers are aware that the shop their buying does not treat they staff in a good manner they won't buy there and if they still keep on buying there then your believes is not shared by the majority of people so democratically you have been voted out.
Perhaps to the majority of people the extra costs of buying at Whole Foods is more than the extra benefits and the cost of guild caused by buying from a company which is less ethical. So it simply does not make sense to them to shop at the more ethical store.
This patter of behavior can be changed if activists can use their resources to raise the cost of guild of not buying ethical. Then more people would be willing to pay the premium for ethical goods and services.

So to most consumers Wal Mart is not bad, but I still prefer Whole Foods and Sears have not given the consumers what they want.

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