In the matter of business, a basic thing is said that starting something which does not have shops in an area is a guarantee of success. The reason for this is believed that due to no competition, the entire demand will go to that one shop only. Although this is not entirely true. You yourself must have seen it many times.

don’t think so

It is often seen in cities that stores of many brands of clothes live next to each other in the market. Similarly, you must have seen the same type of restaurant-hotel from Qatar. In many cities, competing fast food brands like Subway, McD’s, Burger King have stores next to each other. This is also seen in the case of petrol pumps. Seeing this, it is possible that you have also thought that it is like hitting an ax on the leg, but it is not true. These big brands do this under a special strategy of doing business and they also benefit a lot from this.

explained on twitter

The handle Businessaholic (@TBusinessaholic) on Twitter recently explained this formula. This is called game theory. Businessaholic has explained this with an example. Suppose there are two ice cream vendors. Both do business on a beach, which is one kilometer long. It is natural that both want to grow their business. In the beginning, both of them set up their stall at a distance of 500 meters right in the middle of that beach. In this situation, the first vendor gets the right side customers and the second vendor gets the left side customers. At the same time, the customers of the 500 meter portion between the two are divided into both.

This is how the matter rests

Now the next day a vendor sets up a stall right in the middle of the beach in the greed of more customers. Now he gets 62.5 per cent customers, while others get 37.5 per cent. In such a situation, the next day another vendor also comes there and in this way both of them again get half the customers. As a result of this, the business of either of them is not able to grow. In game theory, this is called a Nash equilibrium. This is such a situation, after which there is no possibility of growing in the business of either of the rivals.

what does game theory say

Game theory says that the first company will definitely open its store in the area with the most business potential after doing a good research. Now the rest of the rival companies can gather customers only by opening stores nearby in the same area. In this case, other companies do not have to work hard and easily they also get customers.

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