Oddly enough, this can be a sign of an excellent business. Microsoft originally provided some very mediocre products, but in a world fulled with absolutely shit products, being predictably mediocre was astonishing! Before 2000, when Microsoft produced a lemon, they always seemed to recognise the problem and then replace it with something that was crappily useable (and they also had a few products that were actually good).
Your comment makes me think that products and services are higher quality now, so it is harder to compete by being merely mediocre or even “medium good” (as you point out).