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All happy companies are different

Monopoly is the condition of every successful business.

Most companies have either a monopoly on the market or are in the area of perfect competition.

Perfect competition means, that the company competes on the same terms with many other companies. When a new company emerges, the market, then the profit of all of them, shrinks. Then, a company on this market might run out of money and the market again goes back to the same plane. It’s called perfect because in the long term, with perfect competition, there is zero profit.

In contrast to perfect competition is the monopoly. Let’s define a monopoly here, as a company, operating in such a market, that its position is not in danger and its profit is high. Google is such a company. A British restaurant in Palo Alto is not. You could say, that the British restaurant has no competition because there is not another one in Palo Alto. And if you define the monopoly market as this, that would be true. But the fact is, that this restaurant is competing with other types of restaurants in Palo Alto. So, it’s not a monopoly.

Is a monopoly good? Generally, it’s good because it allows companies to have a high profit, that they can invest in other innovative products, and allows them to have long-term plans. Such long-term planning is not possible in a competitive market. A monopoly is good for innovation and technological progress.

But what do you have to do in order to have a monopoly? Your company must be different. All companies with strong competition are the same, and all great companies are different.

Principles to follow

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