In business, competition is the circumstance of two or more entities trying to derive the best possible outcome for themselves in a given market. The purpose of competition is to spur innovation and improve one’s chances of success.
Competition can take many different forms. It can be between companies, individuals, teams, or even countries. There are different types of competition, such as price-based competition, non-price based competition, and collaborative competition.
Price-based competition is the most common form of competition. In this type of competition, companies try to outdo each other by offering lower prices for their products or services. This can lead to a race to the bottom, where companies are forced to lower their prices so much that they start making less profit or even start operating at a loss.
Non-price based competition is less common than price-based competition, but it can still be seen in some markets. In this type of competition, companies try to differentiate their products or services in order to stand out from the crowd. This can be done in many ways, such as through better quality, more features, or better customer service.
Collaborative competition is when two or more companies work together to compete against another company or group of companies. This type of Competition is often seen in industries where there are few players and where it would be too expensive for any one company to go it alone.