What is 'Dog Eat Dog'

Dog eat dog refers to intense competition in a market. Dog eat dog competition most commonly arises in markets where products or services have become commoditized. In this case, no company can create a competitive advantage in any way other than competing on price. Such intense competition often results in very low profit margins. One synonym of dog eat dog competition is "cutthroat" competition.

Breaking Down 'Dog Eat Dog'

A dog eat dog market refers to such a high level of competition that competitors run a great risk of compromising their ideals or engaging in unethical or even illegal behavior in the name of making more sales. The term comes from the behavior of two hungry dogs and how intensely they can compete for a scrap of meat, even to the point of one dog killing its competitor. One behavior that may be related to dog eat dog competition is a price war.

Under dog eat dog competition, competing companies may operate under the assumption that every sale their competitors make is one they have lost (and vice versa), and that the goal of such competition is the destruction of a competitor. Such behavior is indicative of a zero-sum game and ignores the fact that competing companies should focus on serving customers with the best-possible product and maximizing their own productivity and efficiency.

Dog Eat Dog Competition and Capitalism

Such a high level of competition is often used by anti-capitalism activists to illustrate why the capitalistic economic system does not serve its participants. They argue that dog eat dog competition leads to destructive behavior, and in the end, monopolies. There is some evidence to support this claim; the Interstate Commerce Act of 1887 was enacted in large part due to regulate unfettered capitalism. In the Great Depression of the 1930s, President Theodore Roosevelt and J.P. Morgan' s "House of Morgan" entered into gentlemen's agreements that sought to shore up failing businesses (and acquiring healthy ones) by creating cartels and monopolies to limit competition, otherwise known as "morganization."

Dog Eat Dog Competition and Investing

Investors should generally try to avoid firms which face such intense competition. For example, the airline industry has faced price wars and poor profitability throughout most of its recent history, which is why such companies are often far from the most popular stocks with individual as well as institutional investors.

Dog Eat Dog Competition Defenses

The best firms build an economic moat around their products, preserving their pricing power. A firm can create barriers to entry to its industry through heavy advertising, creating customer loyalty, securing important intellectual property and other means.

RELATED TERMS
  1. Dog

    A dog is a business unit that has a small market share in a mature ...
  2. Dogs of the Dow

    Dogs of the Dow is an investment strategy based on the 10-highest ...
  3. Eat Your Own Dog Food

    Eat your own dog food is a colloquialism that describes a company ...
  4. Total Revenue Test

    A total revenue test approximates price elasticity of demand ...
  5. Implied Contract

    An implied contract is an agreement created by actions of the ...
  6. Eating Someone's Lunch

    Eating someone's lunch refers to the act of an aggressive competition ...
Related Articles
  1. Investing

    Barking Up The Dogs Of The Dow Tree

    One well-known and successful strategy for cashing in on dividends is the Dogs of the Dow. Here's what you need to know about them.
  2. Investing

    Dogs of the Dow for 2017

    With all eyes focused on the Dow's recent rally, there is one investment strategy that couldn't care less.
  3. Investing

    Burger King's New Hot Dogs:Vertical Integration Genius

    Burger King is moving beyond burgers into hot dogs. Here is why this is a smart move.
  4. Personal Finance

    Financial Advice for the Year of the Dog

    According to the Chinese zodiac, 2018 is the year of the dog. If this is your year, make the most of it in your finances.
  5. Small Business

    One-Person Businesses You Can Start Quickly

    Here is a list of professions you can quickly enter with an average-sized to large investment.
  6. Investing

    Walt Disney World Making Some Hotels Dog Friendly

    Up until a few days ago, the only dogs you would see in Walt Disney (NYSE: DIS) World's hotels were Goofy, Pluto, and service animals. That's not so anymore. The entertainment giant has decided ...
  7. Insights

    Solution for Hyper Pups: Cannabis Dog Biscuits

    Well, it works for people. Maybe a little cannabis could calm your puppy and make you both happier.
  8. Retirement

    10 Strange Wills and Testaments

    From dogs to practical jokes, the wealthy sometimes leave their money to strange causes.
  9. Personal Finance

    Bark Box Review: Is It Worth It?

    Find out if BarkBox, the leading e-commerce subscription service for monthly doggie surprise boxes of treats and toys, is worth all the hype.
  10. Personal Finance

    4 Resourceful Ways to Earn Extra Money

    Consider these creative jobs if you are looking to grow your income.
RELATED FAQS
  1. Does renters insurance cover dog bites?

    Learn how a renters insurance policy can provide liability coverage for dog bites and how coverage may vary by state and ... Read Answer >>
  2. Does perfect competition exist in the real world?

    There are significant obstacles preventing perfect competition in today's economy, and many economists think it is better ... Read Answer >>
  3. What is the difference between business intelligence and competitive intelligence?

    Understand the difference between business intelligence and competitive intelligence. Learn why both are important for the ... Read Answer >>
Trading Center