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Business competition is a contest or rivalry between firms to win revenue. It is a fundamental economic force that benefits customers as firms are under pressure to constantly improve products and offer attractive prices. The following are common types of business competition.
Products & ServicesThe features and quality of products and services. For example, solar panels that have a higher energy conversion rate may be preferred by customers.Customer ExperienceThe intangible elements of products and services such as diligent customer service at a hotel.PriceSimilar products and services typically compete intensely on price. Firms with superior products and services in the eyes of customers may be able to charge premium prices.
CostA producer with lower unit costs can choose to compete on price to drive competition out of the market. Alternatively, a producer with lower costs can invest in their business to create superior products and customer service. Either way, a lower unit cost tends to be a significant advantage.Brand AwarenessCustomers tend to chose products and services they know or that they recognize. As such, establishing and sustaining brand awareness is a basic type of competition.Sales A sales force that can close sales can be a significant competitive advantage in industries such as business-to-business services.LocationLocation based competition such as the only coffee shop at an airport.Technologies & StandardsCompetition to establish a technology or standard. For example, competition between electric and hydrogen powered cars.ReputationA firm's reputation in areas such as reliability, quality and sustainability.|
Type | | Definition | A contest or rivalry between firms to win revenue. | Related Concepts | |
Competitive Advantage
This is the complete list of articles we have written about competitive advantage.
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A few sources of competitive advantage for businesses.
The difference between competitive parity and competitive advantage.
A few sources of competitive advantage for businesses.
The difference between competitive advantage and distinctive capability.
Why being first to a market has advantages.
A definition of competitive benchmarking with examples.
The common types of digital maturity.
The common types of business scale.
The common types of marketability.
A definition of competitive map with examples.
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A reasonably comprehensive guide to strategy.
The difference between a baseline and a benchmark.
A definition of strategy vs tactics with two examples.
A list of macro environment components.
An overview of a common business strategy.
A definition of restructuring with examples.
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