My take on Competition

Category: Me trying to be all mature and philosophical...

Competition, when looked at from an outsider's perspective, can be a beautiful thing. (Of course, from the inside, it's always a pain to face competition.) Competition forces all of the players to increase their standards, thereby giving customers better quality and value for their money. Competition is nature's way of enforcing progress in this world.

We live in a world where the rules of the game can change overnight. For e.g.: In the '70s, Switzerland used to be the market leader in watches, with a strong hold of nearly 80%. People used to take great pride in owning a "Swiss Watch". That decade, they invented the digital watch. They immediately sold off the technology to the Japanese (a company named Seiko), because they thought, "This cannot possibly sell! It doesn't have any gears." Overnight, Japanese became market leaders, holding about 40% of the market, while Swiss watches have dropped to 15%.

So what does it take to stay ahead of competition?

For one thing, companies need to be constantly improving the quality of their products and services, and making daily improvements in all of their processes. This principle is called TQM- Total Quality Management. For another, companies must be able to anticipate problems, and take preventive action BEFORE they even happen. "The best time to solve a problem is before it actually happens."

This explains why DEC (Digital Equipment Corporation), a multi billion dollar corporation drowned overnight. They continuously improved and innovated, but they couldn't anticipate the ubiquity of PCs. DEC occupied the same place during the 80s that HP occupies today- 2nd largest computer corporation in the world. Which brings us to the grave realization- the companies we know and (in some cases) love, such as Google, Sun, Microsoft, HP, IBM, Oracle, etc. , could indeed drown overnight. That list isn't complete, and could well include the companies we work in.

As far as software technology goes, the beauty of OpenSource software, among other things, is that it's making the market leaders, Microsoft, struggle really hard just to stay exactly where they are (their stock hasn't gone up in 6 years). It's forcing Microsoft to create stuff like Windows Xp, Office 2007, etc. which are HUGE, HUGE improvements compared to their predecessors- and still not achieving much growth. How will they make people keep paying (big) for their software when they can as well get most of the features from open source providers- free?

Google has a long-term focused attitude- "let's create useful products and services, and think about monetizing later", which I believe will keep them ahead for decades to come. This policy really needs to be adopted by many companies.

From the outside, it's fun to watch these companies fight it out while we enjoy great new software. What this means for us, as individuals, is that we must not only have great plans for our lives but great 'Plan B's and 'Plan C's, etc.. as well. That way, no matter what happens- our dreams will always come true.