When companies compete, they set new standards for other companies to either match or to beat. In other words, competition brings out the best of us and our business, and this is how it does it:
1. It Helps You to Appreciate Your CustomersWhen the sales and profitability of your business are growing, there simply is not enough time to evaluate every customer but when there is competition, you will give time and resources to appreciate every customer. Especially those key customers who represent most of your cash inflows. While you look for ways to retain them, you will find better ways to serve them.
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2. It Fosters Innovation and the Improvement of Customer ServiceStiff competition generates dynamism in the standards within the industry, which not only benefits consumers, but also forces companies to devise better strategies to add value to their business. As competitors seek to improve, they push you out of your comfort zone, which can motivate you to follow strategies to keep your product or service fresh, while setting a higher standard of customer service and innovation. Likewise, competition forces us to take chances and to try new things in order to differentiate ourselves, in order to take our business to the next level.
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3. It is a Source of New IdeasYou can learn a lot from your competitor’s strength and weaknesses and capitalize on it to improve your product or service. You can also learn from how your competitors run their business, products and services to adjust your own business plans.
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4. It Makes You Work Smarter, and It Makes You More Goal OrientedYou can’t afford to be lackadaisical or work sluggishly when you’re faced with stiff competition. Competition forces us to use our resources efficiently and effectively. You cannot waste time, as they are waiting for an opportunity to get you out of the market.
Having competition makes us more goal oriented. We want to achieve more things and do more simply because we can grow ourselves compared with other people. To achieve it, we require using our resources efficiently and effectively, no time to waste, as our competitors are waiting for an opportunity to get us out of the market. Therefore, competition is a motivator for both the owners of a company and its employees. Without competition, less people want to achieve great things; Communism is a good example of this.
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5. It Gives Alternatives to Customers and Makes You Look BetterNot all customers are a good fit for your business; they are not only hard to please, but many times are not profitable, and it is better to let the competitors deal with them. Furthermore, there are customers who switch their loyalty for pennies, but if you're doing things right they will be back; price is not everything. Customers who have tried your products and services and have had experience with your competitors, become a great source of ideas for improvement. Moreover, their references become a great source of new customers for your business.
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