When it comes to entrepreneurship, you should always look for the competitive advantage. Whether it is a marketing campaign or making a sound investment, where ever you can gain an edge puts you that much closer to market penetration. Depending on the industry, you may have to fight a bit harder in your space than others. This competition is perfect for the entrepreneur, the industry, and, ultimately, the consumer. However, I run into too many business owners that shy away from competing. They feel that they would do better without the push for things like innovation or a better customer experience. These are just two of the many things that come from competition. I want to highlight those and a few others for you to think about. Let's begin.
1. KEEPS YOU FROM BEING COMPLACENT
Competitors hold your feet to the fire. They will keep you motivated to always push your business forward. Any entrepreneur worth their weight in business chops do not want to be left behind in their industry. Take wireless carriers for example. T-Mobile was the 4th largest carrier in the country, they were lagging behind AT&T, Verizon, and Sprint. In an attempt to gain market share, T-mobile got rid of wireless contracts and did just that. That forced the other three companies to follow suit by doing the exact thing or some variation. Now the #3 carrier in the country, T-Mobile proved that even though you are not in first place, you can force a change in your space.
2. SPARKS INNOVATION
Innovation is by far my favorite reason for competition. Some of the best products have come from competitors pushing one another. The makers of the Toyota Camry are always looking to one up the makers of the Honda Accord. Apple’s iPhone does not continue to have constant upgrades without the Samsung Galaxy doing the same thing. Competition forces the entrepreneur to think outside the box... that leads to innovation. Microsoft should be a lot bigger than it is (however no one is crying for Bill Gates), but they are not due in large part to the fact that they went a very long time without a viable competitor to spur its growth.
3. CREATES DIFFERENTIATION
When it comes to businesses in the same space or industry, they generally sell the same thing with not much difference. For example, a checking account from Chase will serve the same function as a checking account from Wells Fargo. You can get the same loaf of bread at Krogers that you can get at an H.E.B.( the Texas chain). So what makes a consumer come to your business and not your competition's? Well, things like customer service, product quality, and marketing come to mind. This is what we call differentiation in business or what primarily sets your business apart. Healthy competition forces you adapt and change your approach to remain fresh with your target market. That's why companies change their logo every so often. With no competition, the entrepreneur would be content to never change anything and the market would leave your industry behind due to boredom.
4. FORCES SELF AWARENESS
Having competition forces you to think about a few things. For starters, your strength and weaknesses. Why does your business do well during the summer season but not the winter? If you sell the same thing as your competition, why are they making more sells? Rivals make you conscious of this stuff and how it relates to the marketplace. Self-reflection forces you to make changes and evolve like any other successful business does. Figure out what your shortcomings are first... before the competition exploits them.
WHATS THE BOTTOM LINE?
Show me an entrepreneur that avoids competition, and I will show you a business that is doomed to fail. Competition breeds innovation and an overall better customer experience (which leads to more revenue). Complacency leads to stagnation which is the last thing you need when building a business. So embrace competition and get ready for a fight. However, the beauty of being in business is that you can be fourth place and still be very successful. I would never advocate for being fourth place, but my point is that competition challenges everyone who is willing to competing and in doing so pushes everyone to be successful......and extremely profitable. #AnOwlInYourCorner