The Most Complete Positive and Negative Impacts of Business Competition - In the business world there must always be business competition among business people, for that in this article we will provide information about the positive and negative impacts.

When people understand the benefits of competition in business, they will no longer have a negative view of business risks.

Considering that many individuals think that business competition in any form must be associated with bad things and it is tiring to face it,

However, this is not the case. Business competition has many positive features that can be learned and provides many benefits for both business owners and the businesses they manage. This is especially true for small businesses.

The Importance of Business Competition

It is a well-known fact in the business world that progress is hard to come by without competition. From this it can also be said that competition in business can bring many positive changes if handled properly.

Business professionals who encounter unfair or deceptive competition may adopt an unsophisticated mindset, as these criteria do not completely exclude the potential for such a mentality. Doing so, of course, would not lead to positive improvements.

Cut throat competition

For that, as a broad-minded businessman who wants his business to run smoothly, you need to face the competition wisely. One strategy is to continue to devote maximum effort to developing their business. Because of the benefits of competition in business, it has a significant impact on how well a business does.

Definition of Business Competition

Business competition is competition involving business actors or sellers where both parties have the same goal of making a profit.

Profits can be obtained easily when an entrepreneur manages to develop a successful product that dominates the market, has a significant market share, and sells well in the market.

Business competition will arise between organizations or business entities that supply comparable goods or services. Competition occurs because they have the same target consumers.

When there is a lot of business competition, it means that the market where the product is sold is in good condition and can make money for the company.

Theories About Business Competition

The management dictionary divides business competition into two hypotheses, namely:

Impact of healthy business competition or healthy competition

is competition that occurs between corporations or business actors that takes place without any unlawful behavior. Fair competition ensures that we respect business ethics when businesses compete.

Cut throat competition

This is unfair or deceptive competition between businesses. This competition shows the rise of "market struggle" activities that may use any means to beat competitors.

The idea is that the things they offer can dominate the market and give them full advantage. Meanwhile, other experts such as Ken Smith, Walter Ferrier, and Hermann Ndofot created the Theory of Competitive Dynamics.

This theory explains how the interactions and impacts of actions taken by companies, as well as how the reactions shown by competing companies in the industrial realm. Efforts made are intended to maintain its position in the eyes of consumers, or improve it.

Examples of actions taken include adjusting selling prices, launching special marketing efforts, introducing new items, or even withdrawing from the market.

Benefits of Business Competition

Even though business competition creates major obstacles to business continuity, on the other hand business competition also provides benefits for business growth itself.

The following are some examples of the benefits derived from having a fair level of competition in the market:

Encouraging For Innovative Thinking

When business people face competition, it will indirectly make business people think more inventively, so that many new innovations are born.

When faced with issues related to business competition, business people will be motivated to bring up new and innovative ideas in business to improve their business performance.

Encouraging For Innovative Thinking

Encouraging To Improve Services

There may be competition in the business because there are many people running the business in the same industry. For example, many people want to try running a business in the food industry. Competition in business provides opportunities for companies to provide better benefits and services.

Whether it's improving the quality of service in terms of being polite and helping consumers, or by improving services in the form of maintaining quality, or even improving the quality of the goods or services offered. In addition, business people can also improve services by adding new features or facilities that are not owned by other competitors.

Provide High Motivation

Another advantage of competition in business that has an impact on business is being able to provide strong incentives for related parties, both business people.

Competitive pressure is a way for entrepreneurs to stay on top of their business using a variety of effective business tactics. So that business people who have the drive to survive and build their business will find it easier to find solutions to face business competition.

Such as finding and developing the positive side or benefits that are unique and different from other goods or services. These are different reasons why a customer might decide to leave and look for something else.

Also, business operations will benefit from more motivation, which will lead to better performance. To drive repeat business from current customers.

Get loyal customers

By experiencing business competition, business people will be motivated to improve the quality of goods or services provided and the quality of service to consumers. Businesses can also learn more about the wants and requirements of their target customers by conducting business research.

Get loyal customers

Customers will be more likely to stay with a business if they are rewarded for their loyalty. As a result, customers will be more loyal, and it will be more difficult for rivals to compete.

Provide learning and experience

Another benefit of competition in business that is no less important is being able to gain knowledge and experience. The more business people learn from competitors' success, the more business people want to learn from their own success.

Consequently, future actions will be more appropriate as a result of the experience and knowledge gained here. Remembering that failure doesn't always lead to failure, failure is success delayed.

There will always be ups and downs, especially in business. For this reason, even if you experience obstacles or difficulties, it should be used as learning and experience, such as the benefits of competition in this business.

Positive Impact of Business Competition

Competition or competition in business can not always be interpreted negatively. Conditions that put pressure on businesses in the midst of intense market competition make them inevitably develop products and make changes to the products they sell.

Some of the positive impacts of competition in business are as follows.

  1. Encouraging businesses to improve product quality
  2. Prioritizing customer satisfaction
  3. Develop the creativity of human resources (HR)
  4. Helping to overcome poverty
  5. Absorb labor

The first three items on this list are the types of actions businesses would naturally take to increase the marketability of their items. The fourth and fifth points are the influence of the success of a successful business in the market because it won the competition from competitors.

When businesses do better, they are able to employ more people, which helps fight poverty around the world.

Negative Impact of Business Competition

The bad consequences of business competition are that it allows the following things to happen:

  1. New businesses are difficult to build because the competition is too strong
  2. Price wars make it difficult for businesses to obtain profits that have been calculated from the start
  3. Ethical violations occur because competition is transformed into unhealthy activities
  4. There is a business monopoly

Example of Business Competition

Here are some examples of well-known global business competition:

Coke vs Pepsi

Coca-Cola and Pepsi are quite easy to find in stores, especially in their home country, the United States. In the 1980s, Coke and Pepsi began to compete for market share. Both companies were eager to put out new products and make different improvements.

The original competition for flavor innovation was won by Pepsi, where its products were received effectively in the market, while Coke was ridiculed by consumers because the flavors they developed were deemed failures.

McDonald's vs Burger King

Since they first appeared in the mid-20th century, these two food and beverage chains have been competitive in business. Competition started with the burger menu and reached its peak in the 1990s.

Microsoft vs Apple

Bill Gates started his business by making the Windows operating system while Steve Jobs still stumbled on making the iOS operating system. In fact, Steve Jobs and Apple were on the brink of bankruptcy until Bill Gates stepped in with a financial infusion to help them survive. In the previous 15 years, Steve Jobs had managed to build Apple's business far better than Windows had founded

Ways to Overcome Business Competition

There are five methods you can use to overcome stiff competition to gain an edge and become a market leader, including:

Ways to Overcome Business Competition

  1. Keeping loyal customers
  2. Looking for new market share
  3. Provide a striking difference between your product and competitors' products that are easily recognized by consumers
  4. Get to know your competitors, so you can make products that are far superior to them
  5. Get to know consumers and their desires, so that your products are always purchased because they are considered useful and useful for consumers' lives

The Purpose of Business Competition

There are many goals of competition in business, including:

Add partnership

Being in competition with another company does not mean animosity towards it. Good relationships with competitors can be mutually beneficial, and one of the benefits is the opportunity to work together or network.

The teamwork between the two companies, such as food and film, bookstores and cafes, became partners after each company fought over the same potential customers in malls.

Learn or Updating Business Knowledge

Never too late to learn. In fact, business competition encourages organizations and individuals in it to continuously learn to analyze the market and improve the items they provide.

It takes a company a long time to reach the top it has to work hard from the ground up, always improving and competing with itself. Improve service to customers

Business competition makes it easier for organizations to accept customer requests. With the right customer service strategy, consumers can turn one-time customers into a steady stream of income.

Presenting superior items and fresh produce in every season so that customers don't get bored and run to the competition is a must.

Creating a special product or business brand

Amidst the many comparable goods offered in the market, business competition will push your organization to produce products and build a distinctive image.

The goal is to get consumers interested in using your company's goods. The business competition advantage for consumers cannot be ignored. In fact, business competition is very profitable for consumers.


Business competition has many positive things that can be learned and provides many benefits for both business owners and the businesses they manage.

It is a well-known fact in the business world that progress is hard to come by without competition. Fair competition ensures that we respect business ethics when businesses compete.

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