Better quality: Competition also encourages businesses to improve the quality of goods and services they sell – to attract more customers and expand market share. Do you know why that is? In today’s world, it is essential to business … Benefits of competition is that it makes customers positive towards buying a product. Before we talk about competitor analysis specifically, I want to talk about the importance of analysis in general. This is the same effect observed in the Mobile and Smartphone market. Importance of Competitive Advantage. In a competitive market each individual business will be fighting for customers in order to gain profit. Iphone created a huge demand in the market for smart phones and this market was then captured by Samsung. Competition is healthy in the business world as it encourages creativity and innovation. Whether you’re a micro-business, an established brand or just someone with the beginnings of a great idea, it pays to keep an eye on what your competitors are doing. In fact, competition can be an effective tool for growing and improving your business. Competition is an important aspect that we all face many times in our lives. Instead of generalizing the concept, let us delve deep into why Competition is good for business. Despite it having disadvantages with decreased sales and potential loss of … In contrast to what it seems, healthy competition is almost as important as healthy demand for a business. It brings about new ideas and sees them getting effectively tested in a relatively short amount of time. Look at online reviews and learn about what mistakes your competitors have made, so you can avoid making them in the first place. Simplified local marketing is just a hop, skip and a click away. While many business owners hate their competition, they also recognize why competition is good for business. To learn how to identify an ideal market opportunity and outmaneuver the competition, download our free white paper. When you have competition trying to over throw you, you do business better. 832 Words 4 Pages. Innovative Thinking. Sometimes, your competitors’ weaknesses will reveal an area of importance that you hadn’t thought of, which you can incorporate as a new strength into your business. Suppose, yours is the only business in a particular industry and of course you have complete control of the market. Loyal customers who want to continue utilizing your business will provide useful feedback around these needs. Constant competition further refines a company’s use of resources and forces it to improve … However, even though it is important, the demand increased when there were multiple players of bottled water. It has always been efficient in business. Competition makes you think more innovatively which is necessary for the growth of your business. So one of the major benefits of competition, is that it makes customers positive towards buying a product. Every business plan needs to include information on competitive analysis. Show More. Competition also reduces the need for governmental interference through regulation of business. The importance of proper competition identification within the hotel industry. Whether overtly or otherwise, most companies create a dynamic in … Consequentially you keep asking yourself, what do I do so that my customers are attracted to me and stick with me only? It is important for companies to have competitors because while they may not always increase your quantity of customers, it is sure to increase the quality of your customers and their degree of loyalty toward your business. When you stand out from your competitors, it’s not that you are so different; it’s that despite being so similar to other businesses, you have distinct qualities that set you apart. Quality can mean various things: products that last longer or work better, better after-sales or technical support or friendlier and better service. I was talking to some of our latest entrepreneurs who have begun their business with Start-Up Loans. 15 Ways to Build Business Credit, 5 advantages of market competition to end customers, How To Sell Your Business? The customers would be happiest when they are buying from a segment where there is competition. It makes them positive because they feel good being treated nice, being served well Cooperation is one of the most widely taught skills. If you do not differentiate, the competition will take over your business. Competition is good For Consumers Competition is not only good for your business, it’s good for consumers. Competition is good For Consumers Competition is not only good for your business, it’s good for consumers. Therefore, each business will have to differentiate itself from the crowd and there are three typical ways this can be achieved. Cooperation is one of the most widely taught skills. It is important for companies to have competitors because they keep you on your toes in doing market research. The importance of a competitive advantage is what makes it worth the investment of your organization's time and resources. Business is a war, people. This shows that Apple has never been complacent. 5. As soon as you open your first business you're at the start of a huge race to the finishing line. Competition arises whenever two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). At an early age, we are taught "united we stand, divided we fall." Competition is good for business because it builds the competitive attitude in you. Actually, it is an action plan for maximizes one’s strength against the forces at work in the business environment. A competitive advantage distinguishes a company from its competitors. Here are nine reasons why it’s important for companies to have competitors. What is Market Arbitrage? Business is a competition. It contributes to higher prices, more customers, and brand loyalty. Use your competitors as a catalyst for change and watch your business succeed. Although it can be scary, embracing competition in business may be one of the best moves you can make. (I congratulate you if you think your government is efficient.