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Sep 16, 2013

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Why Competition Is Good for Business

Competition is perhaps one of the most-used excuses for not undertaking. However, it’s good for business, especially if we put aside our fears and learn how to use it to be better.
El Clasico - Barcelona vs Real Madrid - Why Competition Is Good for Business
  The great achievements of mankind are due to competition. The rivalry between the Soviet Union (USSR) and United States (US) is the main reason why Neil Armstrong, Mike Collins and Buzz Aldrin even went to the moon in the first place. The Great Wall of China never would have risen if not for the constant attacks of Mongols and nomads of northern China. Which do you think is the main raison for more than 500 million people around the world to watch "El Clásico", the match between Barcelona and Real Madrid?

  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 Customers

  When 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.

Related post: How to Attract Customers

2. It Fosters Innovation and the Improvement of Customer Service

  Stiff 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.

Related post: Companies Need Entrepreneurs Willing to Take Risks

3. It is a Source of New Ideas

  You 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.

Related post: Should Companies Invest in Innovation or Leaders?

4. It Makes You Work Smarter, and It Makes You More Goal Oriented

  You 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.

Related post: 7 Ideas to Consider Before Creating a New Business

5. It Gives Alternatives to Customers and Makes You Look Better

  Not 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.

Related post: Finding The Right Customers For Your Business