[lbo-talk] Re: expanded choice in the market

Wojtek Sokolowski sokol at jhu.edu
Thu Mar 4 11:52:00 PST 2004


Frank:
> "Another example is the supermarket shelf, which is an absolute riot
of
> choice; fifty six brands of Raisin Brain and three hundred variants of
> mustard."
>
> but mostly an overload of duplication with basic differences meaning ,
> often, packaging and not much more...of course it's better to have a
> cheaper product available at a major crook, like safeway, than a
minor,
> well, not really crook, mom and pop, but there is or should be a happy
> medium...

An argument can be made that the sameness repackaged differently is a result of market competition among small-scale suppliers rather than a result of ownership concentration and growth of the firms' size. Small guys often operate on a small profit and cannot afford much risk taking, therefore they go for the "proven quality". That results in many suppliers offering the same narrow assortment of goods that are easiest to sell - oftent the proverbial lowest common denominator.

Bigger companies have the luxury of the economies of scale, cross subsidizing between more and less profitable lines of products, and deep pockets which makes them to afford taking risks with new lines of product.

When freed from cut-throat competition, people can afford pursuing luxuries and other qualities instead of focusing exclusively on the bottom line.

Wojtek



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