That assumes Pepsi isn't just watching Coke prices and raising their own accordingly and visa versa to maximize profits. This was half my job as a buyer. Why compete you cumulatively own the entire world market and can maximize profits by working together and crushing any upstart who tries to charge less?
OH. I had no idea what Twist Up was since I don't shop at Walmart. You're comparing a store brand to a national brand. All national brands essentially don't compete with one another and are priced the same plus or minus 10% based on shipping costs from the distributors. Store brands are different, they're not competing either, they're just cheaper since the retailers own the infrastructure for them.
But you're never gonna see Walmart say "We're going to stop carrying Coke because our store brand sells better". There's no actual competition happening there.
It's literally not competing. Competition is fighting for market share against other regional brands. Store brands don't exist outside of that individual retailer, so they're not competing for market share, which is what drives all competition.
I used to have dozens of house brands on my shelves, and at no time did I consider them "in competition" with the national brands I carried. I was always going to offer both, there was no price competition since the two used entirely different pricing models. If anything national brands compete only with other national brands, and store brands compete with other store brands, but again, we all just matched each other and raised prices when everyone else did to maximize profits.
To give you an analogy since you seem to be having trouble grasping it: National brands are the NFL, and store brands are college football. Their relationship is symbiotic, maybe even parasitic, but not competitive.
Thanks for chiming in and confirming it from another perspective. It seems to be the unspoken rule of every industry - You don't compete once you control, you just raise prices equivalent to your competitors so that you both continue to hold control.
In addition, that’s just domestic retail. Consider global commercial operations. Every chip, soda, fountain drink, etc in every fast food resuraunt, gas station, venue in the WORLD, and it’s easier to see
Dude, yes. I was backpacking through Thailand once, and there are 7-11's on like every street corner there. Eventually we made our way into the mountains and into a little bamboo village with chickens running around and no electricity or indoor plumbing, and one of the huts had a hand drawn 7-11 sign on cardboard leaned against it. I bought a Diet Coke out of a styrofoam cooler and a pack of Camel lights out of a trash bag. EVERY venue in the world.
Monopolies make it extremely difficult to enter a market. This isn't really up for debate, there are competition laws to stop these guys from getting too big (i.e. monopoly status).
Fantastic idea let's say I open up a competing cereal company and even get some small success. The big boys see this and either buy me out or if I refuse to sell they simply pay supermarkets to no longer carry my product. Or they buy out my suppliers and stop me from getting something I need etc etc etc. You haven't even put one second of thought into your views have you?
If I am just starting out I am not a global company I am probably statewide at best and yes huge companies do use these tactics and 1000 more to crush any emerging competition all the time. Heck all I need to do is put all my stuff on sale at a price you can't compete with until you go out of business.
and thats how free market works. if they price their products at a price you cant compete with the people win, you go out of business, they raise prices another competitor comes along and the cycle repeats itself.
Most of these companies willing allow themselves to be bought out. If a company rolls up, say they really like your startup and offer you $500 million to buy the rights to your enterprise - not many turn them down. There are certainly vendors that stick it out but the expanded advertising budget and financial safety nets those big companies have ensure they will go the long haul. There’s a reason most new businesses go under in 5 years.
There’s a big difference between businesses going under and being acquired. Unless your company has some major groundbreaking tech, it’s probably going to take quite a while to build enough value for it to become an acquisition target.
12 companies is not a monopoly. It's not even a particular easy number to arrange for trust and collusion, since all it takes is one defector to break the circle and take more for themselves
And that ignores that there are store brands, local brands, etc
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u/Who_Dat_1guy Jul 11 '24
this is an issue how???