Competition is healthy

with one eye firmly on the competition.
Just as multiple and mass markets have appeared in many nations, so has competition.
Most suppliers adopt a marketing approach when it comes to their consumers, they look to see what their customers needs and wants are before everything else.
Recently, I came across one social publication that stated that children are not born with a competitive edge till about five years old.
When I enrolled my daughter for Grade One, I was pleasantly surprised that the school reserved Friday for in-class tests.
I was amazed at how the present day curricula expose our children to competition at such a tender age.
And so this trend replicates right up to our prime years and cascades in business and social circles.
Who then would say competition is not good? It is healthy.
In the last decade or so, there has been much greater attention to competition behaviour and no one else has made more significant contribution to the debate about competition than Michael Porter, the American academic from Harvard.
Porter in his writing argues that the intensity of competition in an industry is neither a matter of coincidence or bad luck but merely a question of how the industry is structured.
He came up with the structure of an industry in terms of its suppliers, buyers, potential competitors, substitutes and the existing competition. The collective strength of these forces determines the intensity of the competition and also the profitability of the industry as a whole.
For example, the pharmaceutical and banking industries can be extremely profitable while the travel and transportation industry can be less profitable.
Nevertheless, within each industry whether profitable or less profitable, there will be competition between those supplying the goods and services to the customers.
One of the greatest statesmen of all time once said: “Competition has been shown to be useful up to a certain point and no further, but co-operation, which is the thing we must strive for today, begins where competition leaves off.”
The academics have coined this concept to be co-opetition.
In Zimbabwe, we have the Competitions Act Chapter 14:28. In terms of the Act, any person who is engaging in or otherwise giving effect to an unfair business practice shall be guilty of an offence, i.e. if the complaint is related to anti-competitive practices, collusive and cartel-like behaviour, or abuse of dominance, or monopolisation.
This includes all anti-competitive agreements both horizontal and vertical agreements, abuse of dominant position and anti-competitive mergers and acquisitions.
The Competition Act also has consumer welfare and protection provisions scattered in its various parts.
The Act provides for the consideration of most restrictive practices and all mergers using the “rule of reason” approach.
The Government through the use of a number of mechanisms has seen it fit to control these monopolies and oligopolies by instituting price controls, fixing of minimum wages through labour regulations to prevent big businesses from exploiting workers.
Parastatals were also created as public enterprises in the industrial and commercial sectors to counter and limit the ability of monopolies and oligopolies to abuse their dominant positions.
The Competition and Tariff Commission has also shown a strong intolerance of collusive arrangements between competitors leading to price fixing and/or market sharing, and has come down heavily on the perpetrators of such anti-competitive practices in cases where it has managed to conclusively prove the existence of such practices.
Investigations into collusive arrangements have been undertaken in a number of industries and sectors, including the commercial banking services sector, the cement industry, the dry cleaning services sector, the real estate industry and the air travel business.
Are we then saying a country that has one satellite television service transmission is fair?
What recourse does the consumer have when sub-standard goods are dumped into the country forcing the downstream industry that was reserved for locals to shut down?
There is no way Zimbabwean companies can compete with these products because in their countries they use cheap labour and mass produce while half the time we have no water and electricity in our industries to produce. We ought to then look at competition in a more sustainable way — we need to review our trade relationship.
In the retail sector, we probably need revisit issues to do with foreign direct investment.
The bigger supermarket chains have survived because of external investment. The smaller players who blame competition from established players for the demise of their businesses may have to look at the economies of scale where the consumers’ spending habits have become low.
The current income levels among people are just unsustainable.
Lack of production and high unemployment has affected people’s expenditures.
We need to get the economy back on track so that people can earn more and spend more.
Cheap prices can often mean cheap quality goods. The question is — Is the customer getting value for money?
Till next week, may God richly bless you!