In the business world, competition is often seen as a negative. Competitors will take your customers away, steal your ideas and leave you flat broke… right? Not necessarily. Here are six ways competition can actually be healthy for your business.
1.It drives innovation
Without competition, there’s no reason to improve. In fact, it can be difficult, as you can only compare against yourself. Healthy competition forces you to think outside the box and find better ways to do things – whether it’s through technology improvements, more efficient processes or finding better ways to serve customers.
2. It helps the customer
Competition forces you to see the world through the customer’s eyes. People are continually looking for easier, cheaper and more convenient ways to do things. Improving your service will help create a loyal customer base and save money on customer acquisition.
3. It’s good for your employees
Healthy competition can be a great way to motivate employees to achieve more without using more resources. It makes them less complacent and pushes them to think creatively and find their true potential. This, in turn, helps drive further innovation.
4. It’s a sign of a healthy marketplace
A lack of competition can actually be a sign that there simply isn’t enough demand for your product. Entering a market where there is already competition is often the best strategy for startups and first-time business owners, as it allows them to concentrate more on marketing than on new product development, which is usually much harder.
5.It forces you to stand out
The customer is king when you are competing for their business. Doing exactly the same thing as competitors is a sure path to failure, so you must be able to offer something that will make you unique and irreplaceable. This could be as simple as serving a specific area or age bracket. It forces you to understand your core audience better than anyone else so you can position yourself as the best solution to their needs.
6. It drives growth
In essence, competition is about finding ways to solve customers’ problems in a more efficient and targeted way. When you do this consistently and over time, you get better at it, demand increases and your business must grow to meet that demand.
Historically, it’s been proven that monopolies are bad – both for their owners and the people they are serving. By teaching you what does and does not work, competition leads to smarter goal setting and more satisfied customers.