In business, it’s survival of the fattest not the fittest

Matt Georges
5 min readNov 11, 2020


Everyone ‘knows’ how survival of the fittest works in business: big companies are the fittest by the very fact of their existence. If they weren’t the best they’d go bust — they’d die. But companies are not creatures and many companies don’t out-compete their competitors, they simply buy them. In fact, the process of free market competition naturally leads, in many industries, to the opposite of competition; just a few very large companies dominating their sector. That’s good for shareholders but bad for consumers and taxpayers.

Language matters. To control the language a debate is conducted in is to control the debate itself. It’s like playing at your home ground with one of your team as the referee. Economics is full of the language of Darwin. Economists talk about companies fighting each other for market share, about zombie companies or firms set to ‘gobble up’ their competitors. This is a picture of companies as creatures engaged in a competition for survival as brutal and ferocious as anything taking place on the plains of the Serengeti.

It’s important for very large and very powerful companies to be able to legitimise their continued existence. They often have to fight against complaints of abusing their market power, stifling innovation or becoming too big to fail and a key way they do so is by appealing to the concept of ‘survival of the fittest’. Take this quote from the Institute of Chartered Accountants in England and Wales (ICAEW).

“The brutal reality of competitive markets means that for most companies the chances of long-term survival are slim. The Darwinian process of corporate evolution leaves few firms standing. Only four from the original 1935 FT [Financial Times] 30 index remain in today’s FTSE 100: GKN, Imperial Tobacco, Rolls-Royce Group and Tate & Lyle.”

The explicit picture being drawn by the ICAEW is that the thirty biggest companies in the UK slugged it out, fighting with others for dominance; many were slain until only the strongest remained. But is that what actually happened?

The Harriman Stock Market Almanac — my favourite bedtime reading — helpfully lists what happened to each of the 30 companies in the index. I’ve divided them into three categories: bought, bust and booming. As the ICAEW note there are only four booming, or at least still in business. But only four actually went bust: Austin Motors, Bolsover Colliery, Turner & Newall (who made asbestos…) and Woolworths. The other 22 companies either merged with competitors or were bought by them. Now you could argue that this means they didn’t survive, but think for a moment about the biological equivalent of a company buying another company and merging with it to become bigger. If a lion eats an antelope it doesn’t acquire horns and the ability to jump several metres into the air. If it kills another lion in a fight over a mate it doesn’t become twice the size.

You could say that, while the comparison doesn’t hold precisely, it’s still useful because the companies that got taken over were too weak to survive. But were they too weak and if they were in what sense did they die? Let’s take a couple of examples.

Harrods was listed in the FT 30. It left the index in 1959 when it was bought by House of Fraser before being sold to Mohamed Al Fayed and, most recently, Qatar Holdings. Harrods of course can still be found on London’s Brompton Road today and is still the quintessential British luxury brand that it was in 1935. In fact, according to the BBC, the Chairman of Qatar Holdings, who is also the Prime Minster of Qatar, said Harrods would add “much value” to its portfolio of investments and generate “good and stable returns as a business”.

How about something a little more down to earth? The London Brick Company. It’s currently owned by a company called Forterra. Here’s what Forterra’s website says about its history:

“Forterra plc was formerly Hanson’s UK building products division, founded in the early 1960s. This business built up a significant UK presence through a number of acquisitions, including… London Brick PLC in 1984….

In September 2007, Hanson was acquired by the HeidelbergCement Group and in March 2015 the HeidelbergCement Group sold the Company and Hanson’s North American building products business to Lone Star Funds. In October 2015, the Company rebranded under the name Forterra.”

Lots of name changes and corporate deals then, but at the end of all that there is still a brand named London Brick and Forterra still operates a brickworks at Kings Dyke near Peterborough in the east of England that was originally built by — you guessed it — London Brick PLC. So if the brand still exists and the manufacturing complex does too then in what sense did London Brick fall victim to Darwinian selection? If anything it was so successful that it attracted the interest of buyers keen to invest; a bit like Harrods. And that makes sense. While some investors specialise in turning around poorly performing companies most prefer to buy assets that look like they’re going to perform well.

If we think once again of the lions on the Serengeti competing to hunt antelope then, provided there’s enough prey, we would expect plenty of lions to survive. Certain lions would do better than others and pass their genes on to their offspring but you wouldn’t expect the number of lions to go down unless something was terribly wrong; a drought say or overweight tourists hunting them for sport. But in most healthy, mature markets that’s exactly what economists expect to see; fewer companies.

So in biology, competition allows for diversity or variation because competition does not, except in the most extreme and unpleasant circumstances mean ‘winner takes all’. But when we think of competition in a social and economic sense we often think simply of one — or at best a few — winner(s) and lots of losers. Our sports are set up that way, our electoral systems, many of our job markets.

This is a problem for several reasons, but here’s two big ones. First, it’s anti-competitive. Big companies can afford to spend money on buying out their competitors and paying lobbyists to keep governments off their backs. The eventual result is less choice and higher prices for consumers. Second, having just a few major companies dominating a sector creates systemic risks — in plain English, they become too big to fail. So when it looks like they might fail who has to ride to the rescue? The taxpayer. And the taxpayer is just the consumer with a different hat on.


BBC (2010) Mohammed Al Fayed sells Harrods store to Qatar Holdings, downloaded from

Forterra (2020) History of market consolidation through acquisitions, downloaded from

Harriman’s Stock Market Alamanac (2015) FT30 Index 1935 — Where are they now? Downloaded from

Institute of Chartered Accountants in England and Wales (ICAEW) (2012) Survival of the Fittest in Business, downloaded from



Matt Georges

Trying to work out why a lot of people seem to think the world is getting worse but a few people don't, one article at a time.