Competition often comes with a negative connotation attached. In business, this is equally as true. Many people think it will too difficult or impossible to successfully capture and retain market share when there is direct competition. The truth is, competition is actually beneficial for businesses on several different levels and is a catalyst for innovation and future success. Applying this perspective to your business practices has the potential to enable consistent growth by pushing boundaries and striving to become better in order to stay relevant in your respective industry.
Start to view competition as an opportunity, rather than a barrier, and see how your business begins to shape.
Why are humans naturally competitive?
According to Darwin’s theory (Darwin 1872) on the mechanism of evolution, it illustrates that the competition between individuals becomes more profound within the same species. Competition continues to become fiercer if there are similar characteristics between the two individuals in the same species.
This natural human tendency applies to business and how we try to strive to become better as the competition begins to intensify in order to be considered successful. In addition to this inherent mechanism, there are psychological components that contribute to the competitive behaviour of people in business.
Competition is defined by psychologists as extrinsic incentives and intrinsic incentives, meaning that there are external and internal motivators that influence our decision-making process. For example, if your company has to put out a new product because your direct competition has released a new innovative product, that is when you are influenced by an extrinsic motivator to compete.
If your company has values and morals around helping a specific charity, that is considered an intrinsic motivator as it is evolutionary behaviour to be compassionate and empathize.
Sometimes, these incentives overlap and unfortunately many times the “right” thing to do gets replaced by a more self-serving purpose. For example, are you actually saving energy at your business because it is beneficial to the environment or because it is lowering your monthly bills? And will you continue doing so if your revenues increase?
How does competition help individuals?
Competition propels you to develop many skills to validate yourself in your social, educational, and workplace settings. A lack of competition makes you become unmindful, exposing yourself to make unnecessary mistakes that can jeopardize your credibility. Being aware of your surroundings and continually engaging in self-reflecting will enable you to be the best version of yourself in both your personal and professional life.
Understanding your strengths and weaknesses allow you to measure your success based on your experiences in terms of what is working and what is not. By identifying what you are good at and continue to perfect those skills to their highest potential, you will become a more reputable individual in your space. It is not to say that you should hide your weaknesses, but instead position your weaknesses as a way to learn more. How much effort you put into truly analyzing your capabilities will keep you working hard to build your skillset.
The current status of the world is revolved around creative and innovative approaches that have shaped society to become stronger and better. The main incentive that makes society accomplish new heights is through competition, bringing out the best in everyone. There are many challenges that arise in business, and in our personal lives, that don’t necessarily have a clear solution attached. Often, it requires a lot of creative thinking to overcome these obstacles and, as you practice it, you will begin to push the envelope and drive further competition within your industry.
In all aspects of life, you will run into situations that either make you feel driven or discouraged. Competition is a large contributor to both of these feelings, as it forces you to cope with and overcome hardship. The best way to handle these hurdles is to observe the issues in front of you and break down why you’ve failed and why you were successful. These are lessons that can help you, by re-training your initial reaction to difficult times, leading to better productive management of issues.
Encourages Thorough Planning
To achieve any goal, there has to be a clear roadmap on how to you will complete it. To effectively compete, persevering, and planning ahead will only increase your chances of success. To assume a plan will come together as you go along, is planning to fail. You will stay relevant and feel accomplished by always creatively thinking about how to execute new ideas for your long and short-term goals.
How does competition help business?
Stand Out from Direct Competitors
Without competition, you wouldn’t have to come up with strategies to set yourself apart from in the industry and your business would likely never evolve. When you have so many types of businesses oversaturating each market, the determining factor for consumers is how you are different and what value they receive from your business. Despite all the similar characteristics, what additional things can you add to your roster of products and services that can fulfill and excite your customers’ desires?
When there are multitudes of the same products on the shelves of stores, or on e-commerce sites, it decreases the likelihood of someone choosing your product. Each company is trying to attract awareness of their brand by dropping the prices, adding new features, or by exposing them to advertising. If one company can offer more for less money, other competitors need to follow suit or take their offering to another level – or risk being left out. The customer ultimately benefits from the effects of competition as they can get a high-quality product at a reasonable price, while having more options available.
Ensuring customers are always satisfied with your products and buying journey is crucial to the prosperity of your business. If they can find your type of product or service elsewhere, the only reason they are doing business with you is based on their experience with your brand from start to finish. If the customer has a negative experience, there are many platforms available online where they can use word of mouth to warn others, which can negatively impact your business and the perception from the public. To uphold a positive reputation, and beat the competition, is to do it takes to make things right with each person who does business with you. If you don’t put customers first, other companies will absorb your lost consumers and grow their share of the market.
Better Serve Your Market
It’s imperative, in order to compete, to have a deep understanding of your target audience and how they want to be served. The more your business understands the market, the better you can meet the needs of your customers, improve each aspect of your, and predict the ways the market will evolve and change. You’ll be able to uncover opportunities to increase loyalty by actively analyzing market data. If your competition is not doing this type of research, you will have an advantage as the market evolves.
- Everyone benefits from competition as it is healthy for growth, innovation, and quality of products and services in the business.
- Competition not only helps businesses thrive but anyone involved in the process of competing, in any industry, will be persistently learning new skills.
- Gaining as much knowledge as possible on all the benefits of competition can help businesses flourish and become a leader in their respective industries.
- Always thinking about how a business or individual can differentiate themselves will always result in more market share because there’s constant adaptation to the evolving markets.
How has competition helped your business? What did you learn on the way? Leave us a note in the comment section to share your story with other businesses who may need your advice!