They prevent you from becoming too comfortable and lazy in your business operations Students from eight different colleges and universities competed in this competition. Innovation and Productivity A competitive market drives innovation as each individual business strives to gain a competitive advantage. After all your competitors are a major stakeholder in your business. As there is no other go for your customers, your products might get a boost in the market though customers are not actually satisfied with your service. You might not focus much on quality of service you deliver if there is no competition. This … 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? Competition is good For Consumers. Leveraging innovation, credibility, and more benefits may be the key to your success: Add This Infographic to Your Site Higher quality at same prices – If you look at the Air conditioning market or any consumer durable … Competition may seem threatening at times, but the fact is that it comes with numerous benefits. Over the last 4 years, Tim has written numerous articles on the topic and has been an active contributor in business forums. People would want to work for, invest in, buy from and support your business all over the world. In fact, it is important for companies to have competitors, because it is through competition that innovation and improvement occur. Tim enjoys blogging about business strategy and enterpreneurship. If you own a small grocery store, you inevitably have to compete with major national and regional chains. When making decisions business leaders should ask themselves the following question, “If I take this particular action, will all my stakeholders benefit?” If the answer is ‘yes’ then the right decision has been made. Better Knowledge about Customer Preferences. Customers would have to buy from you regardless. Competition is to be considered as an important aspect of economic growth. Choice: businesses will increase their product range or service offer in order to provide more choice than their competitors. You may still think that lack of competition would be a whole lot easier. If you have any thoughts on this topic please share them by posting a comment. 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. Innovation and productivity in business results in overall economic growth: regionally, nationally and internationally. Therefore, each business will have to differentiate itself from the crowd and there are three typical ways this can be achieved. Filed Under: Blog, Entrepreneurship, Social Responsibility, Please prove you are human In business, there’s nothing wrong with a little friendly competition. Firms may race to be the first to market a new or different technology. I blog about educational management and leadership and have a particular interest in playfulness and humour in teaching and learning. Competition is an inevitable aspect of business. Companies regularly compete among themselves, hoping to win consumer trust and revenue. Quality: businesses will improve the quality of their existing products and services in order to retain and attract customers. Business competition is a contest or rivalry between firms to win revenue. This will increase the productivity of the business making them significantly more competitive in their sector. You try to reinforce your strengths and overcome your weaknesses. Thus, you can easily know the pulse of your customers and this can be utilized to make your business successful. Antitrust laws encourage companies to compete so that both consumers and businesses benefit. This article discusses some of the benefits that competitors can offer to your business. Benefits of Competition: The Major Reasons Why Free and Open Competition is Beneficial to the Economy Promotes the Welfare of Consumers The following are common types of business competition. 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. It creates jobs and provides people with a choice of employers and work places. This is an important consideration when planning value creation for your competitors. If things were going well for any business, it probably would take the businesses longer to brainstorm and implement new ideas. Competition makes people innovative. Here are just a handful of benefits that a competitive analysis can offer. Creating camaraderie helps to … You really become proactive, alert, creative and above all focused. This means that you have a lot of competition in your sector, with other companies always trying to eat into your business. It could be better service, low prices etc. Better quality: Competition also encourages businesses to improve the quality of goods and services they sell – to attract more customers and expand market share. Benefits of Participating in a Case Competition On October 21, 2017, I participated in a case competition hosted by the National Association of Black Accountants-New York and Deloitte LLP. But, this thought arises because of lack of knowledge on how to utilize competition for the growth of your business. Offering lower prices is one of the most common strategies that most companies are doing in order to cope up with the competition. This way, companies are battling with each other just to win over the consumer’s business. In short, you get better ideas that you can make use of. Your email address will not be published. Then, you do not have to think on how to satisfy your customers more than your competitor as there is no such competitor. In fact, competition can benefit your company. What a fantastic position to be in as a business and you have increased competition partly to thank for your success. Just how can competition be a good thing? You would have no one to compete with and all the customers to yourself. 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You tend to regularly upgrade your product as well as innovate so that you stay ahead … Aside from blogging, Tim works at customgear.com.au, a company specialising in promotional products. At least during stressful times of business, business people think that it would have been better if there is no competition in business. In a competitive market prices will be kept low, choice will be high and quality will be improved. Whether overtly or otherwise, most companies create a dynamic in … Your competitors are businesses that may deter people in your target audience from choosing you. Keeps you alert. The business not only benefits during the competition as employees build those bonds, but also once the competition is over. It is a fundamental economic force that benefits customers as firms are under pressure to constantly improve products and offer attractive prices. It’s easy to coast when you’re the only option. One important benefit of competition is a boost to innovation. As far as there is high competition, you get better information about customer preferences or requirements. It’s vitally important to … The path to eCommerce success is rife with costly mistakes that can sink a good business. You are the only option for your customers and they have to be satisfied with what you provide whether it is service or product. When your competitors make more profit than you, it means that they have adopted some great techniques to attract customers. With this strategy, the objective is to become the lowest-cost producer in the industry. But there is a case for supporting your competitors when specific situations arise that will provide mutual benefits.