Why ia “balance” a good thing? It wouldn’t make sense to jump straight to a fully publicly owned economy over night, but gradually fold in more sectors and firms as they develop, starting with all of the large firms and key industries. If you don’t take control of those, then you won’t have actually risen above the Capitalists.
Competition kills itself over time, by the mechanisms you describe, and government can’t truly be a meaningful check on business unless it’s a proletarian government, which requires proletarian control of the base. Competition cannot exist forever.