5 Primal reasons why is competition good for business

So, why is competition good for business?

You may ask yourself why is competition good for business when it’s Doomsday for so many companies. The truth is, small business competition is the driving force. 

Without competition in business, the market will be flat and still. 

The benefits of competition come in many forms, like innovation, creativity, pricing, expertise etc. To understand them better take a deeper look at the following examples of why competition is good for business, provided by entrepreneurs and professionals who were smart enough to take advantage of competition.

Did you know that Adidas and Puma, one of the largest sportswear manufacturers in the world, are a product of direct rivalry?

The importance of competition in business for your online visibility

Using your competitors to discover what content they are creating, the keywords they are targeting and the strategies used to reach potential customers can be valuable.

Another area to improve your website is discovering high authority and relevant backlinks pointing to rival websites. Reverse engineering and replicating these backlinks can improve your online business reach and customer potential.

Ben McLaughlan, Founder of Easy Mode Media

Specialisation is one of the main benefits of competition in business

Without the competition, there wouldn’t be an incentive for specialisation. The rivalry challenges firms to find their niche areas and enhance expertise. That fosters long-term, fruitful ventures that bring real value to the customers. It also organically eliminates the short-sighted businesses driven only by short-term profit. In turn, relationships with clients are not formed out of necessity, but because they are mutually beneficial. That promotes meritocracy and creates more satisfying careers and cooperations.

Rebeca Sena, Consultant of Marketing for Architects & Designers at GetSpace.digital 

As a strategy consultant and executive coach to high-growth tech start-ups, competition is often at the heart of conversations and at the heart of my own practice.

It’s so easy to think that in the absence of competition we would thrive – whether we’re thinking about our business, our colleagues or even a search for a mate. But, competition is both an important indicator and a valuable circumstance.

As an indicator, it tells us something about how much the market demands our product or service. No competition? Either there is no need for what you’re selling, or you’re in the unlikely situation of having a monopoly.

In my own work, there is lots of competition. A CEO seeking a coach or strategy consultant can choose from thousands. But, the fact that there are so many choices has improved my own company. It has required us to hone our expertise, improve our messaging, and offer far better coaching and consulting than we would otherwise. I often send clients to other professionals because they are not the best client for Beyond Better, and we are not the best provider for them. Competition leads to specialization and to higher degrees of excellence.

Amie Devero, President of Beyond Better

Business competition drives improvement

Competition is what makes businesses grow and turn them into the best version of themselves. Being the only one in the market gives you an advantage because people will surely buy from you since you are the only business offering such a product but what’s not good with this set-up is the fact that you only get customers out of their necessity and not because they want it. You may survive for the first months, but it will be hard to thrive when people find an alternative or get tired of sticking with what you offer. 

Competition drives a business to improve and explore its potential in the field. When you don’t feel the threat, you won’t make a move to protect or defend yourself. This goes the same for business. You will only learn to be protective of your assets, your customers, and the business as a whole when you see someone trying to take them over. Moreover it will inspire you to look into other creative ways to make the most of your operations. In many occasions it can be extremely beneficial to form an LLC in order to compete in the country. As long as the competition is healthy, both businesses would benefit. 

Willie Greer, Founder of The Product Analyst

Competition in business forces you out of your comfort zone

Competition is great for business because it forces businesses to be resourceful, nibble, and demonstrate the value of every customer to their business. In highly competitive industries, those mastering all three of these characteristics, combined with efficient operational standards, will have an edge over their competition. Non-competitive environments tend to take much for granted, including those who use their services – the customers. 

Competitive environments demand the very best from those playing in that sandbox. The best product will not guarantee a winning position. And taking one’s eye off the company’s “raison d’être”, is not an option. Those able to respond quickly to changes, leverage technologies and tracked data to innovate quickly, drive loyal customers, and optimize price points by way of efficient operations will stay ahead of others.

Jenn Drakes, Founder of ICANNWORLD INC. 

Having competition forces you to always improve your business and stay on top of the game. There is no time for relaxing because you need to maintain the quality at all times. 

I have seen a lot of business owners who became too comfortable in their positions and didn’t pay much attention to other competitors. Slowly, other companies started taking over the market simply because they were hungry for success. Therefore, as long as you manage to stay up to date with your competition, you won’t risk losing relevance and you may be able to get additional inspiration in the process. 

The more actors there are in the market, the more creative you will have to be, which is great for your business.

Mikkel Andreassen, Customer Experience Manager at Dixa

Customers get the most benefits of competition in business

One thing that I have come to see is that competition ultimately benefits the customer.

In an effort to stay competitive, brands keep their prices within the average price range of the market. There is no undue exploitation of the consumers through charging exorbitantly high prices.

Now, since brands are not competing on price anymore. Brands and market players will adopt a more value-based pricing. In an effort to stand out from competition, brands will bundle in unique offers and services into their products.

Brands or business owners will be more creative and think of out-of-box strategies to capture their customers’ attention. They will work towards understanding the finer details of their target customers – their pain points and triggers for purchase, which can also help discover some new untapped customer needs.

With much value-based offerings, brands and businesses will continuously work towards improving their products. 

So for me, Competition is definitely good!

The customer gets to be the ultimate winner. Not only are they paying for what is appropriate, but they are also getting more value for their money.

Smruti Ghag, Owner of PharmaDigiCoach

Conclusion

Looking at the examples above there’s no doubt that competition is good for business. The benefits of competition in business are mostly felt by the consumers but employees and owners are not left out of the equation as well. It is pointless to talk about small business competition in a negative tone when it’s the cause for constant improvement.