The capitalistic economy believes that competition is good and useful to keep prices “competitive” and good for coming up with new technologies and products. In the macro-economic area, that makes perfect sense.
However, from the company perspective, competition wastes resources. If your company is competing on price, rack space and just thinking more about innovation than thinking about innovation, then its wasting resources.
Consider the picture above in a grocery shelf for “Soy sauce” If a company makes soy sauce and assume it is coming up with what it considers a novel product. Soy sauce made from shrimp instead of fish. Do the purchasers care? How does it distinguish itself in the grocery shelf isle. The company will probably spend extra in paying extra in getting its product placed favorably in the center shelf or probably more in the end tab zone. It will then start spending money on advertising, offering sales, and in general getting them in specialty stores. They would then employ more sales people that would go and flaunt the product all over.
The competition factor makes it uneconomical for any company to come up with a new product that it will not be able to sell efficiently. The one way that the would be able to sell would be if they had a new product that no one else made and that they could market it efficiently to their customers.
How would you market the soy sauce for a company?