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Why Business Competition May Be the Best Thing for Your Business

It isn’t fun, but competition actually brings a number of benefits to startups–just be sure to stand out from the rest.

After Investing $5 billion to develop a range of hybrid and electric vehicles, Nissan-Renault claimed the title of the leading manufacturer of zero-emission cars. CEO Carlos Ghosn has found that it can be lonely at the top. Speaking at the Frankfurt motor show earlier this year, Ghosn said he welcomes competition from other automakers because a bigger field would help jump-start the market. “The more companies that buy into electric cars, the better it is,” he said.

If competition is good for a billion-dollar automaker, why not for your start-up? Although most entrepreneurs dream of having a market all to themselves, research shows that you’re probably better off with some company. Professor Michael Porter of Harvard Business School has written extensively about industry “clusters” and has shown the benefits that competition brings to similar businesses within an industry.

Illustration Courtesy Inc Magazine.

Illustration Courtesy Inc Magazine.

If nobody is competing in your space, there’s a very good chance the market you’re going into is too small,” says Ben Yoskowitz, an angel investor and founding partner at Year One Labs, a start-up accelerator in Montreal. “Any reasonably good idea has 10,000 people working on it right now. You may not even know they exist because they’re as small as you.

James Park, co-founder and CEO of Fitbit, is well aware of his competition. His company, which makes a wireless tracker that lets users monitor their physical activity, competes against similar devices made by Nike and Jawbone. Those big brands, Park says, have actually helped his business by lending it an air of credibility and generating some buzz in the press. “More players in the market implies that wearable tech is a mainstream activity and that consumers should be comfortable adopting it,” Park says. “You need some critical mass to legitimize what you’re doing.

Brad Feld, managing director at the Foundry Group, a Boulder, Colorado-based VC firm, has some rather cryptic advice for start-ups worried about competition: “Be obsessively focused on your competitors while ignoring them.” In other words, know your rivals’ products, market positioning, and financial status, and how they engage users, but don’t constantly react to every move they make.

Nor should you be deterred from entering a market that already has some competitors. “I don’t think a market is ever too crowded,” Feld says. That is, of course, as long as your product isn’t just another “me too” offering. “Most start-ups are competing with the status quo,” says Feld. “Instead, build a company that does something unique.”

Apoorva Mehta hopes to do that with Instacart, the San Francisco-based same-day grocery delivery service he founded in 2012. A former Amazon engineer, he now competes against his previous employer and a handful of other companies that offer a similar service.

Instacart differentiates itself by using personal shoppers to pick up a customer’s groceries from multiple stores and deliver them in about an hour. “Competition has shown us there’s a demand for our services,” Mehta says. “Our product is faster, and we have more selection than Amazon or PeaPod. Competition combined with having a better product means we’re going to succeed.” A little cockiness never hurts, either.

 

While competition may be good for business, it doesn’t always bring out the best in people. Below are a few cases in point.

Steve Jobs

The only problem with Microsoft is they just have no taste. I have no problem with their success. I havea problem with the fact that they make really third-rate products.

 

Jack Welch

No. 1, cash is king. No. 2, communicate. No. 3, buy or bury the competition.

 





Ray Kroc

If any of my competitors were drowning, I’d stick a hose in their mouth and turn on the water.[1]

 

20 Proven Reasons Why Competition Is Good

Have you ever thought that marketing your small business would be easier without competitors? The truth is that most of us have thought that way. Whilst you shouldn’t be fixated on your competitors, you can’t afford to ignore them.

When there are plenty of jobs and business to go around we tend to get complacent and fail to do the things we need to do to stay competitive. We tend to take customers and employers for granted. Customer service drops off and innovation goes by the wayside.

 

Having competition is healthy and you would find the following reasons useful.

1. It Makes Your Customer Service Better

When you’re on the treadmill of a business boom there simply isn’t enough time in a day to stop and really evaluate every single customer. While others are getting all the customers, you have ample time to evaluate and appreciate every customer. Make customers fall in love with you and treat them right. Then when competition comes along they won’t even think of going anywhere else.

 

2. Innovation Is Fostered

Innovation is important to you and your company because competition makes you constantly innovate. When your business is number one or the only one, innovation tends to be ignored. Innovation is incredibly important and is woven into the fabric of what great businesses do.

 

3. Identifies Your Strengths and Weaknesses

You may not always know what your strengths and weaknesses are until your competition points it out. Competition helps narrow your focus a little and concentrate on what you’re really good at that your competition isn’t.

 

4.Competition is good For Consumers

Competition is not only good for your business, it’s good for consumers. This is so because consumers get the opportunity to pick and choose who gets their money, time and attention.

 

5. Reminds You to Focus on Your Key Customers

Competition reminds you every now and then to focus on your key customers. After all, they are the reason why there is more cash inflow. By focusing on them you also come up with ways to serve them better.

 

6. Provides the Opportunity to Serve

Indeed when you have various customers you have a huge task to always serve. Competition makes it very mandatory to keep serving and seeking new ways to serve your customers.

 

7. Makes Way for Creative Thinking

Because you have a mandate to always give your clients a run for their money, competition makes you to put on your thinking cap for better ways to add value. Creative thinking forms the bedrock of any success-minded brand.

 

8. Helps identify potential threats to your business

You are able to learn from other competitors what works and what doesn’t. By learning this you will be able to decipher what plans and strategies or even products would be detrimental to your business.

 

9. Helps Your Strength and Weaknesses

You are enabled to study your strengths and weaknesses. Your weaknesses help you become better, while your strength drives you harder to achieve more.

 

10.Stops complacency

Competition automatically pushes you out of your comfort zone because of the quest to serve better. Leaving your comfort zone also helps you to strive to beat the records of your competitors.

 

11.Consumers benefit from competition

When there is competition amongst brands, consumers benefit from through the promotions or other good things that could capture the consumers.

 

12. Helps Grow Your Business and Market

Strong competition can actually help your business because they keep you on your toes. They also provide valuable market insight, and force you to keep your product strategies fresh.

 

13. Provides an alternative for customers who are not a good fit for your business

There are very difficult customers whom you just cannot please. Trying to fit them into your plan could end up frustrating; so you have the choice of leaving such customers to your counterparts to deal with.

 

14.Provides ideas you can adapt for your products or services

You can learn from what your competitors have put in place to adjust your plan. You are also able to draw inferences from the way they run their businesses, plus their products and services.

 

15.Allows for working together on common industry or market issues

When a brand isn’t monopolized, there is the ability to form a regulating body in that industry. This is so important because this body is able to serve as watch dog for those who might be defaulting in certain areas.

 

16. Helps You Work Smarter

You cannot afford to work at a snail rate when you are in competition. When there is competition you must be up and doing and to speed at all times.

 

17. Makes You Seek Knowledge Voraciously

When in competition one of the ways to always come out tops is reading and researching voraciously. When you read and research widely you will be abreast with issues.

 

18. It Gives Room for Learning

Learning new things from your counterparts is a sure banker. You would learn to broaden your horizon and at the same time add to the growth of your brand.

 

19. It Improves Your Employees

There is always something new to learn in an industry full of competition. Your employees have a whole lot of experiences to learn from. Experiences like; how to handle customers when there is business boom and how to deal with situations when your competitors have more customers than you do.

 

20. Ability for Development

All the experiences you garner during this period, becomes a good raw material to help develop your brand. Check the track records of bigger brands; you will see that they put to good use all the experiences they experienced.

 

Kill that paranoia and begin to glide through your competition rather than feel upbeat. The very moment you become scared of competition and not take advantage of it, you give room for failure to set in.

Failure can never get your brand anywhere. Look up with hope and face your competitors. [2]

 

This Article Curated by Benang Merah Komunikasi’s Editorial team.

We consider to take journalism ethics and contents reposting etiquette seriously, that you can find here about media ethics. We do curation article for our audiences, not for search engine bots. By addressing this growing area of concern we hope reader can be smart to filter and understand between content plagiarism and content curation method.

References Sources:

[1] Taken from Why Competition May Be the Best Thing for Your Business written by Jill Krasny for November Issue of INC. Magazine.

[2] Taken from 20 Proven Reasons Why Competition Is Good written by Valentine Belonwu for BusinessGross

Editorial Benang Merah Komunikasi

Author Editorial Benang Merah Komunikasi

“Benang Merah Komunikasi Indonesia seeks to become a global leader in digital media solutions and digital marketing in the era of AEC ( ASEAN Economic Community ) in 2017 and it has been started since early 2015, especially in Indonesia. We hope that we can give our customers something to create breakthrough digital content, spread in the media and services, measure and optimize from time to time, and achieve greater business success. We help our customers create, manage, promote and monetize their content in each channel and display. We are passionate creative entrepreneurs and strategists working with forward-thinking brands, institutions, and agencies.”

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