5 Advantages Of Competition In Business That Founders Should Know
Advantages of competition in business: They say competition is a rude but effective motivation. The word ‘competition’ has forever borne a negative connotation because it puts immense pressure on us to perform.
It also forges labels of worthlessness and self-pity in our own eyes as well as before others should we fail. And where businesses are concerned, it really is a dog-eat-dog world. There is a constant rivalry ensuing between two parties, whether it is to generate revenue, win customers, secure funding or gain leads and convert them.
This article is intended for all startup founders who wish to or are already running a startup and facing tough competition in the market. However, as a true entrepreneur, you would know how the competition will also help you grow and learn.
Here are 5 advantages of competition in business, and why you should be motivated by competition.
There is a lesson hidden in everything, and the same can be said about your competitors. You can, in fact, learn a myriad thing from them. If you are struggling with a certain area of your marketing, you can try out practices of your competitors thriving in the said field and replicate the same.
Also, you can keep a track of where they are falling short and learn from their mistakes. This way you learn to find unique ways to combat a certain situation and progressively scale your business.
Competition leads to innovation, and embracing competition will help you think from a predator mode and do anything to ensure the success of your business.
2) Enhanced Customer Service & Satisfaction
As a startup founder, you can never place enough emphasis on customers and you would also know their importance in scaling your business. Where competitors are concerned, they don’t always detract customers. In fact, you can also leverage their reputation or services in the market and make a customer base of their own.
For example, a dating app in the market can benefit from the clientele of a matchmaking service, since both of them have a similar customer base of people looking to find the perfect partner for themselves.
So, the sales team from the dating app can connect with users registered on matrimonials, understand their requirements and pitch themselves with the promise to find them a perfect partner in a short period of time. Customers, if convinced, would definitely give the dating app a shot because they are just looking to have their needs met better and faster.
Also, the association with a top competitor will also aid in increasing recognition for your business and will tend to boost your familiarity factor. The customers would also be more influenced to buy from a company that is in the race.
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3) Penetrating & Comprehending Your Core Market
As a startup founder, you must understand your target audience as that is a part of your business’s core values as well. Also, when the competition comes into pictures, it becomes more crucial to be aware of your product and market challenges. More competition is a direct result of more demand and leads to more awareness of one’s product/service.
The competition also helps to make the product more acceptable because of the uproar created in the market. Social media, Digital TV, Apple’s iPhone are all examples of the same.
Earlier, there were fewer social media avenues but today, even Facebook loyalists are trying out different social media platforms like Instagram, Twitter, Pinterest and more. Similarly, iPhone lovers are also switching to top-notch Android phones like One Plus, Google Pixel etc.
Overall, it can be safely assessed that persistent competition equally benefits all parties in the business and if you up your game accordingly, there is no stopping you.
4) Need to Differentiate
Once you have understood your product well, you must focus on differentiating it from other players in the market. This leads to the development of your product, enhancing its quality and giving it a unique tint, which helps draw customers to it. Once every company starts doing this, it leads to several innovative products in the market which increases the market size considerably.
This effect has also been observed in the hyperlocal and mobile and smartphones market. First, there was Home Shop 18 in India and people were happy to have one online shopping resource at their disposal. When Flipkart was founded, there was no looking back.
Subsequently, Amazon penetrated the Indian market as well and then Walmart acquired Flipkart. Now, they are all coexisting, outdoing each other constantly in a healthy way and improving their product consistently.
The same is with the Apple company. It distinguished itself by launching touch phones like iPhones which created a high smartphone demand in the market. Samsung eventually captured it by intently focusing on product improvement and adding better products to its portfolio. Apple made the same move and both companies are at loggerheads since then. However, this has benefitted customers a lot since the smartphone market has grown exponentially.
5) Growing Loyalty
Once a customer starts choosing you over other options on the market, he will continue to choose you again and again. This happens once the customers are satisfied with your product and related services. The more times they choose you, the better you want to serve them. The positive feedback loop helps build long-lasting customer relationships. It also helps outlast business challenges and you can depend on your good customers on a rainy day as well. Having competition does not mean you will have more customers, but you will have quality customers who would be loyal towards your business. This inadvertently is one of the huge advantages of competition in business.
Advantages of competition in business: Conclusion
Successful entrepreneurs are known to meet challenges headfirst and thrive under competitive pressures. Competition, if viewed as an opportunity, not as a threat, helps you propel towards a positive direction. It also opens your eyes towards spheres you are making mistakes in; like not hiring the right people, not leveraging the strength of your team enough, not understanding your product properly or moving along with a flawed business plan.
Even if other companies poach your clients or outdo you in some things, take it positively and learn from the experience. Having a strong online presence, staying sharp and avoiding complacency will surely get you on the road to success.
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