3 ms·

Why are industries dominated by large unprofitable companies? I was told the way to succeed was to offer goods and services that people want, make a profit and

Why are industries dominated by large unprofitable companies? I was told the way to succeed was to offer goods and services that people want, make a profit and grow the company; this was a key benefit of the free market and ensured consumers had access to many good choices and it was all stable and sustainable. Instead unprofitable companies dominate, not because they succeeded in the market, but because they received favor from the wealthy. I'd like an economic system where the companies that offer the best goods and service at the right price grow and succeed. I've heard this is how capitalism is supposed to work, but more and more it seems the key to success is currying favor with the wealthy and capturing a market through external means.

Silverback_VII 3y ago
>Why are industries dominated by large unprofitable companies? The logic is quite simple: by undercutting your competition, you aim to quickly drive others out of business and secure a monopoly. Once in such a position, making a profit becomes much easier.
- Buttons840 3y ago
  Every time I think about this I keep coming back to anti-trust enforcement, we need more of it. And perhaps a single entity having enough money to essentially buy an entire industry isn't a good thing.
  - ajsnigrutin 3y ago
    The problem is, that the thing that's happening is shirt-term good for the users, and people don't want any government action until it's too late. If i start offering $5 oil changes (oil included, price difference covered by VC money), that's good for the consumer... then all the other shops close down, but consumers still get the $5 oil changes... then I hike the price, and only then people start to complain. And if you close me then, who will change your oil? Imagine government banning google for offering free email and killing most of the competition back then... people would complain, a gigabyte was a HUGE amount of space for then, and all that for free!
s1artibartfast 3y ago
>Why are industries dominated by large unprofitable companies? In general, they arent and companies that remain unprofitable dont stick around in the long term. You also need to be aware that there are different ways to calculate profitability, so not all of the headline losses mean what you might think.

Silverback_VII 3y ago

>Why are industries dominated by large unprofitable companies? The logic is quite simple: by undercutting your competition, you aim to quickly drive others out of business and secure a monopoly. Once in such a position, making a profit becomes much easier.

Buttons840 3y ago
Every time I think about this I keep coming back to anti-trust enforcement, we need more of it. And perhaps a single entity having enough money to essentially buy an entire industry isn't a good thing.
- ajsnigrutin 3y ago
  The problem is, that the thing that's happening is shirt-term good for the users, and people don't want any government action until it's too late. If i start offering $5 oil changes (oil included, price difference covered by VC money), that's good for the consumer... then all the other shops close down, but consumers still get the $5 oil changes... then I hike the price, and only then people start to complain. And if you close me then, who will change your oil? Imagine government banning google for offering free email and killing most of the competition back then... people would complain, a gigabyte was a HUGE amount of space for then, and all that for free!

s1artibartfast 3y ago

>Why are industries dominated by large unprofitable companies? In general, they arent and companies that remain unprofitable dont stick around in the long term. You also need to be aware that there are different ways to calculate profitability, so not all of the headline losses mean what you might think.