Why do Competitors Stick Together?
During my business visit to Tirupur, the T-shirt Capital of the World, something caught my eye.
There were a row of eight cloth shops, all stacked right next to each other. In effect, each of them are competing with each other.
Commonsense states that it makes sense for these shops to be spread around so that each one holds it’s own. So, why then did they band together?
You see, there is a big business reason. Even though they are competitors, they help each other by giving the customers the promise of choice. That’s because customers always gravitate towards places where they have better choices. It makes their shopping experience so much better.
This explains why all the chandelier shops are on Mount Road near Anna Flyover and why all the Jewelry shops are in Panagal Park, T.nagar.