Competition is an act that exists in every industry or market, and it can result in either a positive or a negative outcome to the company or business involved in the operation. However, the benefits a business can derive from the competition include the following. First, competition promotes innovation and productivity. A competitive market is surrounded by innovations because individual businesses are forced to think creatively gain a competitive advantage over others within their sector. Moreover, competition ensures that businesses improve their productivity (Stokes & Wilson, 2006). With competition, individual businesses will work efficiently by keeping prices low and maximizing the available resources. Second, competition promotes customer service. Being among companies that offer similar products in the market, one is forced to compete for customers by improving the services provided, and this would result in increased customer loyalty.

Third, the existence of competition in the industry would lead to the company understanding its core market. On the same note, the pressure from the competitors forces the business to dwell strictly on its core audience. For instance, in situations when the company is targeting a particular demographic segment, the availability of competitors encourages the marketing team to understand the settings well. Therefore, the company will benefit from getting insights into what the marketing segment requires and this will allow them to fill the gap. Fourth, competition allows businesses to identify their strengths and weaknesses. A business might not know its strengths and weaknesses until it encounters competition for its products and services (Stokes & Wilson, 2006). Therefore, with competition, the company can narrow its focus, try to determine what it is good at, and get information about the competitors.

Reference

Stokes, D., & Wilson, N. (2006). Small business management and entrepreneurship. London: Thomson Learning.
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