Of course the obvious problem with competition is that there is the same amount of demand, with double (or more) supply.

However, the underlying issue is bigger than that. The competition causes prices to drop. You drop your price to get x companies business. X company drops thier price to get your business. So on and so forth until neither one is making the profit or getting the business to survive. Eventually one goes out of business and the other gets the whole pot.

On the other hand, if there is enough demand for the product (or service) in the area you are supporting, both competitors can well survive and prosper. It is important to research the demand for your area, and not just throw the dice in the wheel.

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