When you hear the word ‘competition’, what feelings arise within you? For some, it may be fear and for others, it might be a spark of fire as you gear up to compete. Think back to your childhood memories of playing sports or board games with the family. There were probably times when you celebrated a win or cried at a loss, but at the end of the day, you learned to compete and respect your opponents simultaneously.
Contrary to popular belief, competition can be a good thing for business - when it’s healthy competition.
As an entrepreneur, you are always taught to look for competitive advantages. Whether it’s a marketing campaign or making a new investment, wherever you can gain an edge puts you that much closer to being successful. And depending on what industry you may be in, you may have to fight a bit harder in your space than others. Still, the same message holds true and you’ll find that competition is actually very beneficial for you, the industry, and your consumers.
However, there are many entrepreneurs who run away from it. Some may feel like it’s too pushy and that they can do better without integrating a bunch of systems and tools that set them apart in a saturated market. It’s time to grow out of that mindset and adopt a new one. One that is welcoming to the thought of competition and embraces all that comes with it.
Here are key reasons that prove healthy competition is good for entrepreneurs:
Innovation is one of the best reasons for competition. When you think about it, some of the best products and services have come from competitors pushing one another. The makers of Apple’s iPhone are always looking to one-up other brands in the market, such as Samsung’s Android and Google’s Pixel. There are constant upgrades to each device that enters the market. Similarly, your business should do the same. By having other competitors to scope out you’ll be able to see what will be the next trend, which leads to innovation. If you’re the only player in your field, it can be difficult to improve. And if you’re in a crowded market, you will rarely succeed by doing what everyone else does. Embrace the competition that keeps you on your feet.
Helps You Better Your Systems
Competitors allow us to see what works and what doesn’t, and even more so, how we should go about those observations to help our business. In fact, 94% of businesses invest in Competitive Intelligence to scope the market. Healthy competition drives you to satisfy the needs that your competitors aren’t. This could be internal with the way a competitor handles employee satisfaction or external with the ways they handle customers. Whatever the situation may be, having competitors pushes you to better your systems that can lead to more profit, satisfaction, and opportunities down the road. It can also prevent you from creating systems that could harm your business, as well.
When there is no competition in a given market, businesses could become complacent with their offerings. Meaning customers would see much less innovation and excitement. Having competition is like always having a fire under your feet. They will keep you motivated to always push your business forward, but not to where they would completely burn you down. Remember, you don’t want to be left behind in your industry. So this forces you to shake off any laziness in the business and develop new ideas on a constant basis.
Allows Differentiation to Shine
Every entrepreneur knows that differentiation is essential for a business’s success. When there’s competition in any given industry, you are probably going to see better quality products and services that make them stand out in even the most saturated market. This can help with getting innovative and pushing you out of your comfort zone. It also allows for the growth of the market itself. By enhancing what you have to offer just enough that consumers see the difference as something exciting and eye-catching, you’ll be putting yourself in a very advantageous position. The result will encourage other companies to do the same, but you will always have the chance to do it better.
Makes You More Self-Aware
Healthy competition forces you to think about a few things. For starters, your strengths and weaknesses. Why does your brand do well during the fall season but not in the spring? If you sell the same thing as your competitors, why are they making more sales? Opponents make you very conscious of these aspects in your business and how it relates to the marketplace. Self-reflection will force you to make changes and evolve as any other successful entrepreneur does. So, figure out what your shortcomings are first before the competition exploits them.
It’s important to understand all the ways that competition can benefit you and your business as an entrepreneur, as well as how to approach monitoring your competitors. When you find clarity in these key factors, you’ll end up with much greater respect for other entrepreneurs, as well as your own.