It helps to discover your’s and your competitor’s strengths and weaknesses. Better quality: Competition also encourages businesses to improve the quality of goods and services they sell – to attract more customers and expand market share. This is a fairly straight forward point to make but it is important that I make this clear before moving on. Companies regularly compete among themselves, hoping to win consumer trust and revenue. You may still think that lack of competition would be a whole lot easier. In fact, competition can benefit your company. People would want to work for, invest in, buy from and support your business all over the world. (EdD Candidate - University of Cambridge). Leveraging innovation, credibility, and more benefits may be the key to your success: Add This Infographic to Your Site If you create value for your competitors it will make your business sector more competitive overall. In order to achieve lower prices, increased choice and improved quality businesses need to work more innovatively and productively. Filed Under: Blog, Entrepreneurship, Social Responsibility, Please prove you are human However, when I add ‘competitors’ into the equation the nodding stops and the thinking begins. In this case, you work with your smaller competition to get a stronghold over the market share. You are the only option for your customers and they have to be satisfied with what you provide whether it is service or product. This means that you have a lot of competition in your sector, with other companies always trying to eat into your business. You may be able to get away with a non-competitive market for a while but sooner or later it will become competitive and when it does you had better be in a position to respond. It creates jobs and provides people with a choice of employers and work places. You would have no one to compete with and all the customers to yourself. To stand out from competition, you always need to be highly motivated and try to remain as a better business owner in the industry. They prevent you from becoming too comfortable and lazy in your business operations There are many benefits of competition in business and I will now attempt to explain and justify this argument as succinctly as I can. Competition is not only good for your business, it’s good for … It’s said you should keep your friends close and your enemies closer. Competitive pressure drives innovation and productivity far more than a business’ intrinsic motivation to improve. Competition is one of the fundamental ingredients for economic growth. For example, if you run a business in a highly competitive, innovative, productive business sector in the UK it will be attractive for customers, staff, investors and communities not only in the UK but also globally. At least during stressful times of business, business people think that it would have been better if there is no competition in business. Competition is good For Consumers. The Benefits of Competition in Business. This way, companies are battling with each other just to win over the consumer’s business. Your email address will not be published. Innovation and productivity in business results in overall economic growth: regionally, nationally and internationally. What a fantastic position to be in as a business and you have increased competition partly to thank for your success. You try to reinforce your strengths and overcome your weaknesses. Altogether, you become highly motivated to achieve great heights. This will lead to more customer satisfaction which of course benefits you in long term. Competition reduces the length at which the ideas are generated and put to use. Sole suppliers in an industry quickly stop innovating simply because they no … Higher quality at same prices – If you look at the Air conditioning market or any consumer durable … I am an educator, writer, presenter and academic based in the beautiful seaside town of Leigh-on-Sea, Essex, UK. As far as there is high competition, you get better information about customer preferences or requirements. This could even mean working in partnership on specialised projects and programmes with your competitors: the very people you are trying to out-perform. I am not suggesting that you give all your customers away, donate money to or share all your research and secrets with your competitors: that would obviously be foolish. You provide a product or a service that is provided by a number of other companies. So, you can study strategies that your competitors adopted which makes them successful. It could be better service, low prices etc. It is a fundamental economic force that benefits customers as firms are under pressure to constantly improve products and offer attractive prices. The pursuit of innovation and productivity often results in the collaboration of ideas and work with other stakeholders. But, this thought arises because of lack of knowledge on how to utilize competition for the growth of your business. But there is a case for supporting your competitors when specific situations arise that will provide mutual benefits. Upgradation. When you consider the secondary benefits of a competitive market and the associated economic growth, supporting a non-competitive market significantly limits your business’ potential for growth. The non-competitive approach outlined above is drastically narrow-minded and would be ultimately short-lived. But these changes don’t just happen overnight and without significant effort on the part of the businesses. Employees will be forced to think creatively and work innovatively to continuously improve within their sector. The competition among them enable the consumers to select a product or products whatever they want. Although economic competition forces lessen your market share, it can also force you to become a better business. If you own a small grocery store, you inevitably have to compete with major national and regional chains. By not embracing competition and being willing to evolve within your sector as choice, quality and price dictates, you will be unlikely to generate the innovation and productivity that is required to substantially expand and grow your business. Better Knowledge about Customer Preferences. Although competing in international markets offers important potential benefits, such as access to new customers, the opportunity to lower costs, and the diversification of business risk, going overseas also poses daunting challenges. Whether overtly or otherwise, most companies create a dynamic in … If you have any thoughts on this topic please share them by posting a comment. You could charge what you want without having to worry about the quality or choice you provide as you would be the only option available. Aside from blogging, Tim works at, a company specialising in promotional products. Keeps you alert. The concept of social responsibility in business involves making a positive contribution to society as a whole. The traditional method to achieve this objective is to produce on a large scale which enables the business to exploit economies of scale.Why is cost leadership potentially so important? The relative stability of Canadian, U.S., and European governments leaves citizens unfamiliar with the significant poli… refers to the potential for government upheaval or interference with business to harm an operation within a country (Figure 7.8 “Entering New Markets: Worth the Risk?”). Remember, No One Succeeds Alone, Wait Until They Get a Load of You: Storytelling & Community Building, Three Poker-Related Analogies for Startups, Tips For The Professional To Make Working Away From Home A Little Easier. (Essay Assignment) Competition among companies can spur the invention of new or better products, or more efficient processes. Competition makes you think more innovatively which is necessary for the growth of your business. You must identify your key stakeholders and aim to create value for each of them in a simultaneous and mutually-beneficial way. Competition is an inevitable aspect of business. A competitive market drives innovation as each individual business strives to gain a competitive advantage. When I articulate this approach to business to my colleagues and students they nod along merrily agreeing with everything I have to say. From generating referrals to coaching your network to building a killer website, we love seeing solo professionals succeed. Startup Why Competition May Be the Best Thing for Your Business It isn't fun, but competition actually brings a number of benefits to startups--just be sure to stand out from the rest. You might have to adopt new technologies or business strategies to stand out from competition. Benefits of Competition: The Major Reasons Why Free and Open Competition is Beneficial to the Economy Promotes the Welfare of Consumers You need to drive innovation and productivity in your sector in order to become world class at what you do. Customers would have to buy from you regardless. Competition also creates opportunities for individuals to enter the marketplace and start new businesses. Innovation and Productivity A competitive market drives innovation as each individual business strives to gain a competitive advantage. You tend to regularly upgrade your product as well as innovate so that you stay ahead … You might not focus much on quality of service you deliver if there is no competition. Required fields are marked *. By analyzing your competition, you can learn from their failures and avoid making the same mistakes that could potentially ruin your business. Your store doesn't have the same buying power or clout with vendors as the majors, but that doesn't mean you can't successfully compete on other factors. Thus, you can easily know the pulse of your customers and this can be utilized to make your business successful. One important benefit of competition is a boost to innovation. Tim enjoys blogging about business strategy and enterpreneurship. Antitrust laws encourage companies to compete so that both consumers and businesses benefit. The following are common types of business competition. The business not only benefits during the competition as employees build those bonds, but also once the competition is over. But if it benefits all stakeholders then its collective positive impact will be desired. Just how can competition be a good thing? Thus innovative thinking does not become a necessity which makes you inactive in thinking. In this example, the more soldiers you have in your army, the better. The path to eCommerce success is rife with costly mistakes that can sink a good business. If you operate your business in this manner you will leave yourself wide open to new entrants within your sector, starting up with ease and stealing your customers with a higher choice and quality of products and services at more affordable prices. Then, you do not have to think on how to satisfy your customers more than your competitor as there is no such competitor. The interests of all your stakeholders are interlinked and by helping one you will often be helping another. Business competition is a contest or rivalry between firms to win revenue. Competition may not be the only driving force behind price, quality and choice for consumers and it is certainly not the only driving force behind innovation and productivity – but it certainly plays its part. As you work toward your online business degree, keep the following four benefits to competition in mind as you advance your career. It’s easy to coast when you’re the only option. Once you are world class the world will seek your services. While the competition may not exactly be your enemy, there are still advantages to knowing them. If actions only benefit your competitors and penalises other stakeholders then it is not an action you would want to take. In a competitive market prices will be kept low, choice will be high and quality will be improved. In building a business you work diligently to identify and capitalize on what sets you apart from others that currently occupy the marketplace. Avoiding complacency. This will increase the productivity of the business making them significantly more competitive in their sector. Therefore, each business will have to differentiate itself from the crowd and there are three typical ways this can be achieved. Designed by Elegant Themes | Powered by WordPress, Without ‘feather’ ado… find out how Twitter takes marketing to the ‘nest’ level – ANGIE AYACHE, find out more here yY9gek, follow this link wfYmIi, this web page 0CUyND, link to a continuation a8mr4H, learn more here, this web page NiCX0c, go to the source uwm6C, continue god, click the following article hgX, Working Solo? Innovation is crucial to the progress of any business. In business, there’s nothing wrong with a little friendly competition. But creating value for your competitors is massively counter intuitive, surely?! Quality: businesses will improve the quality of their existing products and services in order to retain and attract customers. Working efficiently will allow a business to keep prices low and maximise their available resources. You never wish to go down and you become a real hard working at the same time smart individual though it might be to stand out from the competition. Your competitors are businesses that may deter people in your target audience from choosing you. Competition between employees is an inescapable part of most people’s work lives. But, this thought arises because of lack of knowledge on how to utilize competition for the growth of your business. Employees will be forced to think creatively … It brings about new ideas and sees them getting effectively tested in a relatively short amount of time. Suppose, yours is the only business in a particular industry and of course you have complete control of the market. Competition may seem threatening at times, but the fact is that it comes with numerous benefits. If things were going well for any business, it probably would take the businesses longer to brainstorm and implement new ideas. You stop being complacent and always think of better ways to satisfy your customers. This … Competition makes people innovative. I appreciate it is not always this simple and sometimes benefiting all stakeholders simultaneously is extremely difficult and even impossible in some cases. Customer Intimacy, Product Leadership or Operational Excellence – Pick one and don’t be greedy! This is due to the endless need of staying ahead of others which in turn forces people to act fast. I AM HUMAN. After all your competitors are a major stakeholder in your business. In a competitive market each individual business will be fighting for customers in order to gain profit. This article discusses some of the benefits that competitors can offer to your business. When you have constant competition, you need to make new and exciting offerings to your clients to stay relevant and ahead. In short, you get better ideas that you can make use of. Creating camaraderie helps to … Offering lower prices is one of the most common strategies that most companies are doing in order to cope up with the competition. One of the benefits of competition in the business as well as in the economic environment is the lower consumer prices. But if there are particular situations where staff collaboration, sharing of finances or referral of customers is mutually beneficial then collaboration with competitors will support the growth of the sector as a whole benefiting everyone. Your email address will not be published. When competitors are around you, you would be forced to provide better quality service. Grocery Competitive Advantages. I blog about educational management and leadership and have a particular interest in playfulness and humour in teaching and learning. Competition is to be considered as an important aspect of economic growth. Advantages and disadvantages of competition in learning. One of the most popular and well-known benefits of competition is how it allows for stronger innovations in any given industry. If the achieved selling price can at least equal (o… Here are just a handful of benefits that a competitive analysis can offer. But by having this ideal in mind, the concept of simultaneous value creation for all stakeholders, without the need for trade-offs, is crucial for achieving successful and meaningful social responsibility practices. Quality can mean various things: products that last longer or work better, better after-sales or technical support or friendlier and better service. Building Your Brand, Marketing Professional Services, Referral Building At least during stressful times of business, business people think that it would have been better if there is no competition in business. Students from eight different colleges and universities competed in this competition. With this strategy, the objective is to become the lowest-cost producer in the industry. Healthy competition encourages change which will distinguish your company from others through technology, product alterations or by improving the customer experience. Many (perhaps all) market segments in the industry are supplied with the emphasis placed on minimising costs.