Competition is part and parcel of the market economy for any businesses aiming to get the lion’s share, sell as many products as possible, and make a big profit. However, opportunists have spread rumours to encourage unhealthy competition and get the upper hand over their rivals.
To take part in healthy competition, businesses must improve the quality of their products, lower production costs, use new designs, do more promotions and expand their domestic and overseas markets.
However, there are businesses that use every trick in the book to defeat their rivals and hold sway in the market. One of the tricks is spreading rumours, which is not costly but causes a huge amount of damage to rivals.
Crooked businesses often dwell on sensitive issues, such as trading methods, personnel organisation, product quality and the private lives of major figures in rivalry companies. Several global giants such as Sony, Erickson, Coca Cola and Pepsi used to fall victim to these rumours. In Vietnam, though the market economy is still in its infancy, not a few genuine businesses have taken a big hit on account of false rumours.
The Ha Long Canned Food Company in Hai Phong City is a case in point. Not long ago, when its products had sold well in southern provinces, including HCM City, a rumour started to go around that the products did not meet hygiene and safety regulations. Consumers in HCM City immediately boycotted the products, diminishing the company’s credibility in the market. It took the company nearly two years to restore and build up its reputation, but nobody knew who was behind the rumours.
The Danh Thach Mineral Water Company in Khanh Hoa province also fared badly due to rumours that it had used an outdated production line which did not meet the required technical specifications in terms of the contents. It took the company and the relevant agencies several months to prove the product was up to national hygiene and safety standards. But the loss of earnings and consumer trust has been a severe blow to the company.
Spreading rumours to tarnish the image of each other’s rivals is now becoming a common occurrence. A company fails to win a bid for a construction project after rumours that it is in financial trouble. Perhaps the company has to cancel their bidding process after news that the project has a legacy from its previous investor.
Rumours are weapons for unscrupulous businesses to capitalise on, and it is not easy to deal with such unhealthy competition. Vietnamese businesses have yet to put forward solutions to this kind of unhealthy competition, and they mostly rely on State management agencies which often deal with such tricks passively. That’s why the inflated rice prices created by a number of opportunists in 2008 caused a huge loss of profit to rice exporters.
Vietnam has issued the Competition Law which is expected to create a legal corridor for businesses to enjoy healthy competition. For State management agencies, it is time consuming and costly to quash false rumours. Even if the rumours are brought to light, financial and administrative penalties are not strong enough to offset the losses businesses often suffer.
While waiting for tougher measures from the State agencies, businesses have no choice but to protect themselves by way of improving their management skills, increasing the quality of their products and enhancing their credibility.