2.5 Competition diagrams
The competition between Experts is to have and retain the best specific clients. See for example the world’s big accounting firms providing their expert services to Fortune 500 companies.
The Product maker does not own the market which he created. The market starts to exist by itself and could be entered by other Product makers who compete for their market share. Product businesses can only use copyright protection to prevent competition from making identical product.
The Self-Service company opens the market within itself. Therefore the competing businesses must do the same. By doing so, the competition is extending the self-service way and market. The Self-Service way cannot be protected. For example, the world’s first internet bookstore cannot prevent their competitors from opening similar online stores with the same goods.
In the case of Commodity Orientation, the competition for acquiring customers stops since the business can always supply its commodity to any purchaser or to the Commodity Exchange warehouse.
From the customer’s perspective, the business competition within each Orientation can be explained using the following examples:
- Expert:
From a minimum of two master jewelers, the customer will select one who will design and custom-craft their bespoke wedding ring. - Product:
To get a ready-made golden wedding ring, a customer chooses between rings from different producers. - Self-Service:
To buy a ready-made golden wedding ring, a customer chooses between several gold ring stores. - Commodity:
The Customer, which is the gold Commodity Market represented by gold Commodity Exchanges, cannot choose anything. It has the obligation to absorb the gold supplied by a gold mining business. (This can happen quite literally: if the business does not offset its hedging position, the Exchange must buy the gold for an agreed price and stock it in its warehouse.)
Note:
See also the blog post “Can you find the 5th market constellation diagram?”