Monopoly is a desire for every business because, in this type of market situation, there is only one gainer. But in today’s world, it is hard to imagine a monopoly in any category as options is diverse. Above all, customers don’t like monopoly much. They need choices while buying. And from this basic perspective, here comes a question- Is it good to establish your business near competitors?
Well, it is a dicey situation. Your business can go either way. This strategy works for many on the other hand closes many businesses as well.
So we will look at the situation from both angles. Why you should establish your business near a competitor and why you should not establish your business near a competitor.
Why you should establish your business near competitors?
There are two major reasons. First, customers love choices, and second, desire for better service.
Consumers Love Choices
In a country like India, there is hardly any person out there who does not compare before making a purchase. And for that, a competitor is required. So it is as simple as that. If in a particular area there is only one service provider, straightway establish your shop a few meters away from it. This will work. But, just keep in mind a little thing, there should be enough demand in the area for particular services.
Desire for Better Service
If there are few service providers in an area, there are chances in a highly populated country like India, customer service will be erratic. So it is a win-win situation for you. Your competitor has done lots of hardship in creating a market, and suddenly, from nowhere, you popped up, and with better service, you earned customers. Isn’t it great?
Why you should not establish your business near competitors?
The key reason why one should not establish a business near a competitor is that there will always be instability. You cannot say your customer is assured. Today’s economy is customer-centric. Your customers will not mind walking away if they get a better deal.
So the final decision of establishing your business near a competitor should be taken after considering all the aspects because the situation can go either way.
What do you think about this? Let us know in the comments section below.
