Competition and the thirst to succeed are at the heart of the best businesses. At their best, competitive markets deliver great things for consumers:
- Lower prices
When businesses compete to deliver a product or service, there is a downward pressure on prices, as firms aim to attract customers through lower prices. For example, OFCOM analysis suggests that customers in the UK pay some of the lowest prices for broadband and mobile phones, in comparison with other major countries. This downward pressure on price, has been driven by competition, has meant that the onus has been on business to innovate and reduce operational costs.
- Higher quality
Firms can aim to increase market share by luring customers with a superior product or service, or in regulated markets, there is a pressure for firms to increase standards to continue to be the private provider of choice. For example in the rail industry, overall customer satisfaction – punctuality, journey and frequency – stands at 80% in spring 2015, compared with 76% back in 1999.
- More innovation
Customers also look for something new and different when they are buying things. Not so long ago, if you needed money you had to go into a bank branch to cash a cheque. If you needed the money outside of 9–5 opening hours, or at a weekend, you’d be out of luck. Today you can access your account, transfer money and make payments 24hrs a day using a mobile phone app — in fact it’s become the leading way that people choose to manage their money. Innovation over time has delivered cash points, internet banking and contactless debit and credit cards – all designed to make the product more geared towards customers’ needs.
So what do you think? Where else have competitive markets given consumers a better deal? Where aren’t they working as well as they could do?
Have your say @bizdebate using #consumertrust.