You’re right - that was essentially a typo. Of course having a competitor doesn’t build market share. But it does build markets, increasing the market size for any given share. Furthermore, modern large companies understand that external competition forces focus and improves the quality of their own products, which helps build a market as well.
I can give you a concrete example. One of the reforms Jack Welch undertook at GE was to stop the practice of internal sales. GE is such a big company and has so many divisions that essentially it was its own oligarchy. GE Aviation buys controls from GE Intelligent Platforms. GE Appliances buys hardware from GE Lighting, which in turn buys raw material from other GE businesses, etc.
The policy used to be that when a GE business was seeking a vendor, it had to give strong preference to another GE business if at all possible. It seemed to make sense - why would you allow a competitor to profit from a sale to you when a similar product is already available in GE? Why wouldn’t you support your own business?
What Welch realized was that this policy was making the business lazy. Why bother to make the best product you can when your main customer is another GE business and they are forced to buy from you? Why strive to provide the best service you can to another GE business when they can’t go anywhere else anyway? And then of course the GE businesses buying the substandard GE products would then be at a competitive disadvantage over other companies that had a better supply chain.
So Welch eliminated that, and said that when making purchasing decisions within GE, products made by GE should get no special dispensation at all. They would be forced to compete with 3rd parties on an even playing field. This paid off almost immediately, exposing weak products, lazy teams, and poor business models. Being forced to compete in the market is an excellent way to improve the quality of your company.
This is actually a fairly well understood principle. Healthy competition forces everyone to be better and to provide better products, and that in turn builds markets. One of the reasons this is true is because even a monopoly in a certain product isn’t a true monopoly so long as there are alternatives to that product. Canada Nickel once held 95% of the world’s nickel production capacity as I recall, and yet their pricing was not seen to be predatory. The reason is because for most of their customers there were alternatives to nickel if the price was too high or the quality too low.
Maybe you just worked for a bad company. Does it still have dominant market share? What is ‘predatory marketing’?
There’s no question that a corporation can wind up with a large share in a market - the question is whether that dominance or monopoly is due to coercive policies, or whether it has dominance simply because it’s the best. If the latter, who cares? Google has a dominant share of the search engine business, but that’s not because it’s a coercive monopoly - it’s because no one has managed to do it better. But even such monopolies or near-monopolies lose market share rapidly if they lose focus. I remember the arguments for breaking up Microsoft - the argument was that it had monopolistic power because it had locked in a large percentage of computer users into its operating system, and the barrier to entry into the market was therefore too high for competition to take hold.
But look what’s happened since: The rise of smart phones and tablets, and the resurgent Apple are eating Microsoft’s lunch. In the meantime, ipads and open-source software are eating into Microsoft’s lucrative enterprise businesses.
I wouldn’t say that they’re ‘encouraging competition’ rather than recognizing that the fear of competition is necessary to keep a business focused on its strengths.
I work for a large company and am in a lot of strategic meetings, and I have never heard anyone talk about devious ways to stifle competition. Our focus is always, always on what customers want. To the extent that we look at the competition, it’s to note where they are ‘winning’ - and how. Then we try to improve our product to take away their competitive advantage.
That’s been true in every business I’ve ever been associated with, except for one very small business. And in my experience, that’s where most of the shenanigans come from. Most employee abuses happen in small businesses as well. They’re the ones that are under-capitalized or where the cost of doing business comes out of the owner’s pockets, and they’re the most likely to cut corners or shaft their employees. In general, Large corporations have too much invested in their brand and too much capital at risk to dick around like that. When large corporations do something bad, it’s usually traceable back to some lower-level manager or employee cutting corners - not a result of some overarching villainous plan.
Big corporations do engage in shenanigans at a high level as well, but the most common form is to ‘partner’ with governments in a way that locks out competition or increases profits, or to use regulations to their advantage. Part of this is the gross use of patent war chests to freeze out competition, or lobbying for regulations that give them some advantage. If a company has already invested in a large lead-testing facility and their competitors haven’t, it suddenly becomes a great idea to lobby government for new safety standards that mandate lead testing. That sort of thing.
So where’s the evidence that consumers have been greatly harmed by monopolization? How about a list of corporations that have maintained coercive monopolistic positions for any length of time? How much of their price was increased due to that monopoly position? What was the cost to society? Usually these arguments are presented in vague and anecdotal ways.
There’s a good reason why markets don’t trend towards monopolistic control, and it comes from information theory. When corporations get large, they start to suffer from the same problems that governments do - power becomes disconnected from information. The people making the big decisions are far removed from the field, and don’t understand their own markets. They rely on information flowing up the chain, and that’s always problematic. They also suffer from bureaucratic bloat and the breaking of healthy feedback loops by self-interested managers and employees. They devolve into silos of disconnected departments and divisions, and become sclerotic and hard to change. Individual incentives stop aligning with overall corporate goals.
Successful corporations that stand the test of time are constantly re-inventing themselves, abandoning markets in which they fail, seeking new opportunities to grow, restructuring and re-organizing as the world changes, etc. But every time you do that there’s an opportunity to get it wrong and fail. Sometimes companies survive by constantly buying up other businesses to add to their portfolio, but that has its own risks - mainly that the small company you bought became successful because it’s small and has a lot of specialized domain knowledge (often that’s what you’re buying), but once it gets absorbed into the behemoth that advantage begins to erode and eventually vanish. In my own company I’ve seen that many times.
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