The three major categories of privatization are divestiture, deregulation, and outsourcing. The most significant privatization successes in the U.S. have been in bringing competition to various monopoly industries. Competition brought immediate benefits to consumers. Private firms frequently privatize by outsourcing and divesting. Outsourcing is the simple admission that the best computer chip manufacturer may not be equally competent at overseeing janitors.
Divestiture is the company's move from a weak to a stronger market.
The failure to outsource and divest means that a firm's ability to specialize, focus and compete is diminished. Ultimately, the firm cannot capture sufficient revenue and ceases to exist. With the goal of bringing economic benefits to consumers, governments have a role to play in maximizing competition in both sectors. The economic continuum has socialism and capitalism at opposite extremes with many intermediate gradations. Service is lowest and cost is highest at the socialist extreme.