It is difficult to imagine a location in this world, particularly in the modern world, without rivalry of some type. The vast majority of people are competing, maybe even without realizing it, to accomplish something, no matter how big or small. There are varying degrees of them, and the degree of each varies depending on the situation.
Different levels of competitiveness
The term “competition” has many accepted definitions, depending on the context. However, productivity must rise for anything to be considered “competitive.” Friendly competition is the most prevalent and easiest type to see. Usually, friends or relatives will create this type. There are also the more somber ones, including rivalry inside organizations, the workplace, or even international rivalry (Cann, 2016).
Impacts of competition in business
There are a couple of types when it comes to business competition. Here are the most frequent ones:
- Direct competition. Companies in the same business, such as fast food, apparel, etc., must be in direct rivalry with one another. They also market comparable goods that meet the same requirements. Lastly, they target the same clientele and distribute their goods using the same strategies.
- Next is indirect competition. They still serve the same clientele, work in the same sector of the economy, and aim for the same market. They are in the same category, which is why this is still seen as a competition. For instance, even though they officially sell distinct items, burger and pizza brands are instances of indirect rivalry because they are both in the fast food sector.
- Lastly, there is potential competition, often known as replacement competition. Since there isn’t one yet, this specific competition is really unique. The majority of these situations include two businesses: one producing currently utilized goods, and the second aiming to market an enhanced version of the first company’s product line (Pahwa, 2023).
There are many benefits when two or more companies compete with each other. These could include:
- Innovation is often forced into happening with the right amount of pressure and motivation, mixed with a sprinkle of creativity. This could also possibly lead to more benefits for customers as they try to be more successful than each other.
- For a customer to be considered a brand’s royalty, they must like the company better than another one. This is not possible if there is healthy competition between companies that can help each other by ironically making customers dislike their own (Kebbe, 2023).
However, while it is certain that there are multiple positive sides to business competition, there are obviously dark sides as well.
- Companies may be compelled by competition to overspend on costly advertising and promotional tactics that ultimately hurt their bottom line.
- Unless one side totally kills the other, competition will always result in a decline in the market share of enterprises. Clearly, this is not to either party’s taste.
- Employees may feel under pressure due to intense competition, and in certain cases, they may be. Employees will feel pressure to perform exceptionally well and come up with innovative ideas, particularly in rivalries between large corporations like Pepsi and Coca-Cola (Pahwa, 2023).
References
Cann, O. (2016). What is competitiveness? [online] World Economic Forum. Available at: https://www.weforum.org/agenda/2016/09/what-is-competitiveness/ [Accessed 13 October 2023].
Kebbe, E. (2023). Advantages And Disadvantages Of Competition In Business • eComStrive.com. [online] eComStrive.com. Available at: https://ecomstrive.com/advantages-disadvantages-of-competition-in-business/ [Accessed 13 October 2023].
Pahwa, A. (2023). Business Competition: Definition, Types, Importance & Examples | Feedough. [online] Feedough. Available at: https://www.feedough.com/business-competition/ [Accessed 13 October 2023].
