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, the average monthly mobile phone contract has decreased steeply in the last 5 years. 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 81% in autumn 2014, 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. Innovation over time has delivered cash points, internet banking and contactless debit and credit cards – all designed to make the ultimate 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.
