The question of whether the economic principle of competition applies in both private and public organizations can be read in two ways. Perhaps it makes the distinction between companies that operate in the public sector—in other words, government organizations versus private sector entities. It could also be referring to non-government companies but distinguishing between ones that are privately held versus publicly-traded corporations.
In either case, the economic principle of competition applies as it generally does, with a few exceptions. Both private and public organizations need to remain relevant, freshen their service and product offerings frequently, and be responsive to their customers' changing needs.
If they do not remain relevant and update their services or product offerings in response to their customers, they risk having more agile and customer-friendly market entrant swoop in and gain market share at their expense.
There are only a few instances where this is not true....
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