Chillin'Competition

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Archive for September 21st, 2010

Duopoly – A Real Life Example

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The idea of this post came while having lunch in the centre of Brussels (I am definitely a competition geek).

Until recently, Noordzee (on the left side of the picture) enjoyed a local monopoly on the market for fast fish-seafood standing meals in the centre of Brussels (my shot at this somewhat original market definition). Their business concept was simple: you eat and drink outside, standing.

I was, with loads of other customers, a great fan of Noordzee. Yet, ordering there  involved queuing, eating in uncomfortable conditions,and possibly supra competititive pricing.

A while  ago, a restaurant located on the other side of the street (ABC on the right side) decided to replicate Nordzee’s business concept. ABC installed tables on the outside and started to serve customers just as Noordzee had done in the past.

Everyone, including Noordzee seems to withdraw benefits from this expansion/entry. Noordzee has reduced queuing time and increased consumer satisfaction. In addition, the optics of having an increased number of people around the restaurants is good in terms of brand image and advertisement. I am not sure, however, that prices have plummeted. Tacit collusion may be the reason there.

(Picture subject to copyrights. Source: taken with my mobile phone earlier in the day)

Written by Nicolas Petit

21 September 2010 at 2:18 pm

Posted in Uncategorized