Mission of FA
In the battlecard "mission of FA", it states that "Minimize MS (market share), so consumers benefit from private mkt", can someone help me explain how minimize MS could help consumers benefit from private market?
It looks like you're new here. If you want to get involved, click one of these buttons!
In the battlecard "mission of FA", it states that "Minimize MS (market share), so consumers benefit from private mkt", can someone help me explain how minimize MS could help consumers benefit from private market?
Comments
Hi,
Let's generalize this statement a little -> Why is it good to minimize any firm's market share in general? Imagine if Tesla was the only firm in the world to sells cars (100% automobile market share) What's to stop them from raising prices by a 100%? People would still buy them because cars are a necessity. Tesla would be able to rake in exorbitant profits and would not have to bother with any form of customer service as everyone would be buying regardless.
Basically, the smaller the market share of any one company, the more competition exists. Competition forces firms to set more competitive prices, provide better customer service and prevents price gouging as the consumer has a plethora of options in the open market. This in turns protects the consumer whether it be in cars, insurance, groceries or what have you.
Hi again,
I've thought about this further and I think being more specific with regards to the battlecard -> The FA seeks to minimize its own market share. Why? This is because the private market offers better service and has an incentive to innovate, all with the goal of increasing their own profit. The FA does not have this incentive so the bigger FA gets, the worse customer service and innovation are for the general public.
Thanks a lot for the second comment. Great point!