Healthy competition is most desirable where there is an ample market. In manufacturing business the nearby presence of a competitor improves labor resources and the two organizations working together can obtain concessions from railroads, utilities, and others that neither could get alone. Since their markets are not entirely local, the fact that they are near together is not a handicap. In the mercantile field the effect of competition, even in areas where the market is large, will vary according to lines of merchandise carried. In staple goods, such as notions, groceries, drugs, and small hardware, close proximity of large store competition is often undesirable, since trade will be limited to the particular area and there may not be enough to go around. In regard to shopping goods, like furniture, appliances, and apparel, the fact that two stores are side by side is in favor of both, for people will go a great distance to buy shopping items and will go more readily if there are two or more stores in which to shop.

Service industries depend entirely upon the local and share available business with competitors in proportion to the reputation, aggressiveness, and goodwill of each establishment. Ordinarily the advantages just mentioned resulting from locations near competitors do not apply to service industries, however the presence of progressive retail stores in the vicinity is usually desirable.

The only dangerous competition in most cases in unscrupulous competition, and that type of business is usually short lived as compared with longer established, more ethical concerns. Occasionally, however, unethical practices can be carried on over a long enough period to make business impossible for the smaller, legitimate operator. The presence of any such competitors, or the iminence of their presence, should be carefully determined and considered if the business is in a highly competitive trade.