Posted on : 13th February 2023

What is the Importance of Competition in Business?

Competition is integral to our market economy and every sphere of life for that matter. If I talk specifically about business competition in India, we are wrong to think that competition is always cut-throat and unhealthy. Competition, when it is healthy, can work wonders. Competition, when you let it grow healthy, can prove lucrative for you and also for your country. 

Business competition is not only something which is inevitable. It is also something which is necessary. If there is no competition to begin with, you are likely indulging in monopoly. Mind you, this might benefit you for a short term, but it will eventually stagnate you and even turn customers against you. 

Importance of competition in business cannot be disregarded. There are many reasons when I say this. Some of them are as follows: 

• Competition encourages you to innovate and expand

Think of the world where you have no competition in the product/services your business caters to. There would obviously be no incentive for you to innovate and expand. Also, I do not think that motivation can always come from within. External factors are required to stay motivated. And you know, that’s what business competition does for you; it pushes you and motivates you to reinvent and innovate. And when you innovate, progress happens rather than stagnation. It is what we as individuals and as citizens run after, right? 

We need to grow and our business to grow. We need to keep expanding our target audience and cater to more and more different kinds of audience with our new innovations. You should know, this is all what helps our business thrive.  

• Competition encourages you to think of your customers

Our products and the services we offer are no more the central focus of our businesses. It is why competition business for sale counts. Our competitors for the most part are selling the same products and services, they are targeting the same audience, and there might not even be a difference in the selling prices. So, what do you think distinguishes us and our business? Customer service. 

Now more than ever, businesses face the need to understand the desires of the targeted customers and meet those desires. You need to invest in marketing more than ever. You yourself are a customer to various other businesses. Wouldn’t you like to have your aspirations and needs met? The same goes for your own customers and you need to realise this.

• Competition encourages you to broaden your horizons

There are different types of competition in business. While you have competitors who provide the exact services as you, you may also have competitors who might be satisfying the same needs of the customers or who might even be replacing the needs your business meets. Take, for example, McDonald’s and Burger King which provide the same fast-food services. Pizza Hut meets the same cravings/needs of the customers as those other two. And then there is Starbucks which might be considered a replacement competition. 

So, you see, it is not minimal innovation that we discussed here. Business competition encourages you to widen your horizons at a large level. It need not even be intimidating. You can rather take it as a healthy challenge which helps you maintain your entrepreneurial fierceness. And you know, what is a business if not fierceness?

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