Who's Afraid of Large Companies?

Whenever a company becomes dominant in its sector, many of its competitors cry foul. In a free economy that company has more than likely reached this position because it has simply outperformed its rivals. Good luck, I say. Although it goes against the grain, I recognise that there would come a point - a point, that is, when dominance turns to monopoly - when the authorities may need to clip the wings of such a successful company. However, this must surely be a last resort. I am convinced that European countries have got this wrong.

The bar is too low. The alarms bells ring far too early. There is too much state interference in the running of market sectors when such interference can often lead to long term imbalances and a tendency to stifle innovation.

I don't think we should be resentful, or feel threatened when a company becomes large. When this happens it always throws out new opportunities. For instance, a big company is usually an unwieldy company. The board is usually aware of this and fights against it, but it happens all the same. Why? This is because such companies take advantage of their size by streamlining their business. This brings economies of scale, but also means that change is more expensive. When a new product comes on the market, or a new way of selling a product, large companies may take a long time to adapt. Smaller, nippier companies will take up the slack and win the prize, leaving the lumbering giant puffing and struggling to keep up.

Another opportunity is customer service. As companies grow, they put more barriers up between themselves and their customers. If you ring your local store run by Joe, you will probably speak with Joe. If he is busy he would ring you back. If you try to ring your local store run by a large corporation, you are more likely to be put through to a national call centre, asked for your customer id, your zip code, put on hold for 3 minutes and had the telephone call recorded. As soon as a company starts to treat its customers like that then a gap in the market has just appeared. Large companies are rude. They treat their customers as cattle, only fit to be sold to and nothing else.

Whatever it is that a large company sells, whether it is a product or a service, they will not resist the temptation to rationalise their product range. They will prune out low profit offers and major on the high profit ones.

So, a customer walks into a supermarket and can't find that duck liver pate that she so loves. She asks the assistant why the product is not available to be met by a shrug of the shoulders, or, if she is lucky, a page out of the manual "how to tell a customer the Duck Pate is not economical for us to sell". Now, a gap in the market has appeared. Let's hope our customer knows Joe. He may just start stocking the Duck Pate. Yes, he will charge more than the supermarket did, but he recognises a gap in the market.

This happens all the time: companies grow; they cannot adapt to change fast enough; they begin to treat their customers with contempt; they remove product lines, leaving customers high and dry. As a company grows and stretches, it starts to leave holes in its product and service offer. As the holes grow, smaller companies fill them. Of course, small companies become large ones too, and so the whole process renews itself.

This is as natural as nature itself and should be allowed to continue with only the lightest regulatory touch. The process should only be interfered with when monopolistic practices are inevitable and unavoidable.

I mentioned customer service earlier and must moderate my stance just slightly. It is surely possible to have a call centre that is responsive to customers, that doesn't record calls and is courteous, even friendly. If one exists, though, please let me know. The point is that customers' time is valuable. Being held in a queue for a period of time on the telephone is an unwelcome imposition. Arkay Hygiene is the UK's leading wholesaler of Insectocutor fly killers. After about a year, the ultra violet light emitted by the lamps used in the machines starts to degrade. Some fly killers use glue boards that are used to trap flies.

Before the onset of summer, customers who are not on an automatic replacement scheme will be on the telephone asking for replacement lamps and glue boards. Thankfully Arkay Hygiene is large enough to afford the best standards of customer care and very competitive pricing. It is also small enough to respond to customers' requirements. When customers want to purchase uv lamps or glue boards Arkay Hygiene will respond there and then, without recording their calls!

Big may not be beautiful. Perhaps small is also not beautiful. How about medium -sized is beautiful. Not much of a slogan, but perhaps true all the same.

Vernon Stent is the marketing consultant to Arkay Hygiene. Here you can see IND65 glue boards and here you can buy uv bulb products