The Importance of Competition in our Economy
The Importance of Competition in our Economy
Our economy is basically based on one major concept; competition. Competition is defined in Webster's Dictionary as being a trial of skill or ability. Competition can sometimes be a good thing, and it can also be a bad thing. It all depends on which end of the spectrum you are. Competition between two companies can benefit society just as often as it can hurt society. One major example of this is Wal-Mart and other large corporations coming into a small town and running small privately owned shops out of business. It is on this main topic that I will focus the rest of this paper on.
Small businesses across the United States are being forced to close due to the success of large chain stores. The success of these chain stores has been argued to be beneficial by some and detrimental by others. Wal-Mart is the world's largest retailer and it is still growing. There are many benefits Wal-Mart can offer a community, such as a decrease in the unemployment rate, as well as an increase of individual and per capita income. Some other benefits are that the opening of a Wal-Mart will create a larger tax base, and also there will be an increase of visits to the city by out-of-towners. These are just a few of the many benefits that the opening of a Wal-Mart or another large corporation would have on a town.
One final benefit that may be a little deceiving is an increase in total retail sales. This may be deceptive because the increase most likely at the expense of many small businesses in that city and neighboring cities. Many different types of specialty stores could possibly suffer and go out of business. For example, Wal-Mart alone could put several stores out of business such as food stores, general merchandise stores, department stores, hardware stores, variety stores, specialty stores, and apparel stores.
Large corporations including Wal-Mart have made claims stating that small businesses can compete with them. Some of the suggestions they make to smaller businesses include forming coops. Also, small businesses are urged to make shopping an experience, as well as embrace new technology. Small businesses can also fulfill an unmet need. Location is also extremely key in competing with large...