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Most U.S. businesses, large or small, belong to what is called the private enterprise system. 1)This means simply that firms operate in a dynamic environment where success or failure is determined by how well they match and counter the offerings of competitors. Competition is the battle among businesses for consumer acceptance. 2)Sales and profits are the yardsticks by which such acceptance is measured.3)The business world has abundant examples of firms that were once successful but that failed to continue satisfying consumer demands.Competition assures that, over the long run, firms that satisfy consumer demands will be successful and those that do not will be replaced. The private enterprise system requires that firms continually adjust their strategies, product offerings, service standards, operating procedures, and the like. 4)Otherwise the competition will gain higher shares of an industry’s sales and profits.Consider the following cases. A & P was long the largest supermarket chain. Now Safeway is the largest, and A & P is attempting a recovery. Ford once was the dominant automaker. Today, it is second to General Motors, among domestic producers. These events suggest the dynamic environment of the private enterprise system. 5)Competition is a critical mechanism for guaranteeing that the private enterprise system will continue to provide the goods and services that make for high living standards and sophisticated life styles.Few organizations that offer a product or service can escape the influence of competition. The American Cancer Society competes for contributions with the American Heart Association, your own college, and other nonprofit enterprises. The armed forces compete in the labor market with private employers. Even the U.S. Postal Service faces competition. United Parcel Service competes for package shipments. Express Mail faces competition from Western Union’s mailgrams. And firms like The Mailbox, which rents post office boxes in the Seattle area, compete for the post-office-box business.
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