The Most Complete Positive and Negative Impact of Business Competition

Lovata Andrean

Positive and Negative Impact of Business Competition

Rancakmedia.com – In the business world it always exists business competition between business people, for this reason 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 is tiring when faced with it,

However, in reality this is not the case. Business competition has many positive features that can be studied 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 correctly.

Business professionals who face 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, will not result in positive improvements.

Cut throat competition

For this reason, as an insightful businessman who wants his business to run smoothly, you need to face competition wisely. One strategy is to continue to devote maximum effort to developing their business. Due to the benefits of competition in business, it has a significant impact on how well a business runs.

Understanding Business Competition

Business competition is competition involving business actors or sellers where both parties have the same goal of generating profits.

Profits can be obtained easily when an entrepreneur succeeds in developing 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

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

Cut throat competition

This is unfair or deceptive competition between businesses. This competition shows widespread "market fighting" activities that can use any means to beat competitors.

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

This theory explains the interactions and impacts of actions taken by companies, as well as the reactions shown by competing companies in the industrial domain. The 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 goods, or even withdrawing from the market.

Benefits of Business Competition

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

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

Encouraging Innovative Thinking

When business people face competition, this will indirectly enable business people to think more inventively, so that many new innovations are born.

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

Encourage to Improve Services

There may be competition in business because there are many people running businesses 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 is improving the quality of service in terms of being polite and helping consumers, or by improving service in the form of maintaining quality, or even improving the quality of the goods or services offered. Apart from that, business people can also improve services by adding new features or facilities that other competitors do not have.

Provides High Motivation

Another advantage of competition in business that has an influence on business is that it is 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 by 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 looking for and developing positive sides or benefits that are unique and different from other goods or services. These are different reasons why customers might decide to leave and look for something else.

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

Get loyal consumers

By experiencing business competition, business people will be encouraged 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.

Customers will be more likely to stick with a business if they are rewarded for their loyalty. As a result, customers will be more loyal, and rivals will have a harder time competing.

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 businesspeople learn from competitors' successes, the more businesspeople want to learn from their own successes.

As a result, future actions will be more appropriate as a result of the experience and knowledge gained here. Remembering that failure does not 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, you should use them as learning and experience, such as the benefits of competition in this business.

Positive Impact of Business Competition

Rivalry or competition in business cannot always be interpreted negatively. Conditions that put pressure on business people in the midst of tough market competition make them inevitably develop products and make changes to the products they sell.

Among some of the positive impacts of competition in business are the following.

  1. Encouraging business people to improve product quality
  2. Prioritize customer satisfaction
  3. Developing creativity in human resources (HR)
  4. Helping overcome poverty
  5. Absorb labor

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

When businesses do better, they can 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 competition is too strong
  2. Price wars make it difficult for business people to obtain profits that have been calculated from the start
  3. Ethical violations occur because competition transforms into unhealthy activities
  4. There is a business monopoly

Example of Business Competition

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

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 are eager to release new products and make different improvements.

The original competition for flavor innovation was won by Pepsi, whose product was effectively accepted in the market, whereas Coke was ridiculed by consumers because the flavor they developed was considered a failure.

McDonald's vs Burger King

Since they first appeared in the mid-20th century, these two food and beverage chains have competed for business. The competition started with burger menus and reached its peak in the 1990s.

Microsoft vs Apple

Bill Gates started his business by creating the Windows operating system while Steve Jobs was still stumbling around creating the iOS operating system. In fact, Steve Jobs and Apple were on the verge of bankruptcy until Bill Gates stepped in with an IV drip finance to help them survive. In the previous 15 years, Steve Jobs succeeded in building Apple's business much better than Windows was founded

How to Overcome Business Competition

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

  1. Maintain loyal consumers
  2. Looking for new market shares
  3. Provide a striking difference between your product and competitors' products that consumers can easily notice
  4. Get to know 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 beneficial and useful for consumers' lives

The Purpose of Business Competition

There are many competitive goals in business, including:

Adding a partnership

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

The teamwork between the two companies, such as food and movies, bookstores and cafes, becomes partners after each company fights for the same potential customers in the mall.

Learn or Update Business Knowledge

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

It takes a long time for a company to reach the top, it has to work hard from the bottom 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 revenue stream.

Serving superior goods and fresh products in every season so that customers don't get bored and run away to the competition is a must.

Creating a special product or business brand

In the midst of the many comparable goods offered on the market, business competition will encourage your organization to produce products and build a distinctive image.

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

Conclusion

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. Healthy competition ensures that we respect business ethics when businesspeople compete.

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Lovata Andrean

Hi, I'm Lovata, I'm not Ai but I am a content writer for SEO, Technology, Finance, Travel, Cooking Recipes and others. I hope this can be useful for all my friends. Thanks