analysis of an issue(gmat practice)

"The presence of a competitor is always beneficial to a company. Competition forces a company to change itself in ways that improve its practices."

Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations, or reading.
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The presented argument should be considered with a pinch of salt.

The reasoning on which it is possibly based is that "competition" is a positive influence. Competition by itself can be of differing natures. Fair and healthy competition can promote improvement in the practices and functioning of a company. If the company and its competitor follow the law and don't indulge in unfair practices , then there is only scope for improvement in order to compete. For example consider the restaurants on Mosque road in Bangalore. All of theses restaurants cater to similar tastes . They sell the same kind of food , but they do not indulge in any unfair practices such as trying to influence a customer not to go to any of the other restaurants. They try to improve on the food quality and the service as well in order to keep their customers and get new ones. In this case , the "company" responds in a positive way ;competition is a positive influence and forces the company to improve its practices. The arguments holds true in this case.

On the other hand, if the "competition" is unfair, the company on the receiving end,in order to fight back or just survive , might have to indulge in practices similar to those of the competitors. This will definitely not force a company to "improve" itself . For example , auto rickshaw drivers in Bangalore are now increasingly becoming shrewd at cheating customers as a result of unfair competition. When an honest auto rickshaw driver sees that he is losing out on customers and money because his dishonest counterparts use unfair means to cheat customers like rigging up the fare meter or taking a long winded route to the destination , he might be forced to learn and adopt these techniques in order to survive and prosper . In this case , it can be seen that the argument does not hold true and thus we can say that the argument is not complete and does not cover all possible cases.

The examples cited above are real life examples and I think that they would hold true if you even replace the restaurants and auto drivers with companies . What they try to prove is that its not necessary that a company's policies improve with the presence of a competitor, they can also deteriorate or go bad. The argument is thus not a sound one and should be considered conditionally , ie, with a pinch of salt.