Value Monopolies [Archives:2002/28/Business & Economy]

The Road Ahead
By Raidan A. Al-Saqqaf
Monopolies are considered to be as unfair trade practices. That is a right assumption. They are exclusive control over a commodity or a service that makes manipulation of prices possible. Government rules & regulations should control monopolies in order to reach fair trade practices.
Looking at the issue from the business standpoint, monopoly is a golden chance to earn the maximum profits from the organizations operations and achieve its objectives with no worries about competition or whatsoever, but in todays market, monopolies are dominated and limited to only few industrial sectors.
Business started competing with each other and trying to offer better services than competitors and sell more than their competitors. But at the end of the financial year, they realize that they have fought too hard to increase their market share but their profits have not increased much. So they expand in new segments and offer other services in order to create some kind of monopoly in the new field, but these strategies last only for short-term periods and the need for a long term strategy appears, which is value monopolies.
Value monopolies are created through long-term consistency in quality, price, availability & image of both the product and the organization. Quality can be considered as the most important aspect, it is the backbone of value monopolies. It is a long process of creating products of high value and includes the different usages of the product, advancements and after-sales services, you cant be offering a law in quality product and expect it to have a high value, it should go beyond customers expectations of the product. The pricing strategy of the product should tell that by buying this product you get more value against the money you pay for it, available for the customer, how would you feel when you are looking for your favorite toothpaste and you dont find it? disappointment strikes!!
The Image has an increasing importance nowadays, through images, brands are built. When you favor a brand a relationship is established, and relationships in general are very image sensitive, you want to associate yourself with the brand you like to be associated with.
If this was executed very carefully, in turn this should result in a single product service in the market which has much more value than the next substitute.
This is one of the major keys of our success here in YemenTimes.
The point is to improve the quality of the product to such an extent that when a customer wants to buy a product there would be one product which is much better and far more reliable for him which in turn should create monopoly for the product in terms of value because there is no other product that can give you the same or near value.
Research & Development also plays a role in creating value monopolies. It helps have a Technical advantage over competitors and increases the overall quality of the product service. This is why organizations insist to spend huge amounts on research and development.
Endnote: every bit adds value, with consistency in quality, price, availability and image value monopolies are created. But its not that simple, its done through years of hard work.

——
[archive-e:28-v:2002-y:2002-d:2002-07-08-p:./2002/iss28/b&e.htm]