There is a general belief held by many people that capitalism is the best form of business enterprise, which is good not only for those that are capitalist business companies but also for the consumers, with the general belief that capitalism, because it incentivizes companies to be competitive and to improve themselves, makes for a win-win type of scenario. The thing is, though, when it comes to competition, we duly find that some of the biggest corporations in America don’t actually care for competition, but rather prefer to buy out, align with, or eviscerate such if a deal can’t be made with their competition, mainly because less competition will thereby bring them more power and thereby more profit.
One would think that this nation would make it its point that it would not encourage monopolies except in those areas in which it makes eminent sense, such as we see in the utility sector. Still, even then, if there is just one operator, they are regulated by the government to make sure that they are fair to the constituents of such. This then would presuppose that corporations that already have the lion’s share of a particular business should not be permitted to buy out upstarts or competitors, because allowing this to happen will make them even more formidable, of which it will eventually reach the point in which their position is unassailable.
What needs to be taken into full account is that most companies are driven by both growth and by profit, signifying that they are going to do their level best to improve both, and if they can acquire a rival company that brings something of value to the table, that will instantly increase their growth, while also bringing a very good chance that profits will ultimately improve, it will be done. So then, aggressive and motivated companies are always going to be looking for strategic alliances because it will make them stronger, more powerful, and will increase profit.
All of the above, are reasons why even in the most competitive of fields, we find that over time that unless the government steps in, that companies that are in the same type of field are going to be reduced in number, leaving fewer companies that are now much larger, and those companies in order to maintain and also to enhance their position, are going to have a continuing interest in buying out rivals, because it will help them to dominate with the ultimate goal to be the sole prime player.
Additionally, we find that for those companies that prefer to remain independent, that all of this consolidation not only puts pressure on them to make some sort of deal, but also might well lend itself to their being vulnerable to being put under intense pressure by a much larger competitor that can afford to operate with extremely low margins or even at a loss, if they believe that by doing so will make the other company vulnerable to insolvency which if this occurs, will ultimately make their position in the long term to be even better.
Indeed, it needs to be continually acknowledged that corporations that are permitted to buy out their competitors lead to monopolies, duopolies, and the like, which is great for those companies, but is not in keeping with what is good for America, because it isn’t competitive which means ordinary Americans have to pay more for what they get because of that lack of competition and the fact that their government appears to be asleep at the wheel.