In best markets, when a corporation presents a brand new profit, others will shortly transfer to match it.
Which means it’s onerous to justify the onerous work of making one thing higher, as a result of it’s simply going to develop into a brand new commonplace. It doesn’t pay for a bank card firm to put money into customer support, the considering goes, as a result of that received’t pay for itself, it’ll simply elevate prices for the chief and for all of its rivals. That’s how the race to the underside begins.
Maybe it pays to easily deal with being higher at making a revenue, or being higher at getting new prospects, or being higher at making the inventory value go up. These proxies push short-term considering and aren’t resilient.
What really adjustments the sport is when a corporation decides to decide to being higher at being higher.
That’s onerous to do and tough to compete in opposition to.
