Today, market competition is not just a term, but an expression that determines the nature of relationships in society. Its influence is not limited to business alone. The spirit of rivalry is everywhere: from sports fields to places of romantic dates. Nevertheless, the concept of market competition is a purely economic term, mostly related to the world of finance and business. So what is it, and how does it affect the daily activities of subjects of economic relations?
If we take this concept in a broad sense, then market competition is the producers, intermediaries, consumers of anything, and their constant interaction among themselves. The escalation of this process is inevitable and is growing along with the level of consumption. Market competition is, in fact, capitalism in its purest form. The forefront here is the task of defeating a competitor and end up in the “ladies”. In a narrow sense, market competition is a rivalry that unfolds between market participants for better conditions (production, purchase and sale of goods and services).
Often the goods / services of firms located in the same market niche carry a minimal set of significant differences. How to stand out against the general background? Some companies prefer to increase their share of sales by stepping on the path of price wars. Others strive to achieve success by improving the quality and reliability of their products. Both those and others do not hesitate to wave the motley flag of advertising, trying to achieve fame in the consumer circle (stubbornly forgetting that “famous” does not mean “preferred”) ... How to catch your wave and stay afloat in modern commodity cash relations? From corporate strategy to leverage in a particular situation, each organization follows its own unique path. But maybe there is still a universal way to get ahead of business rivals? ..
The forms of market competition are diverse. It is generally accepted that in developed and developing countries competition is perfect (although this is far from always the case).
To become truly unsinkable, it is not enough for a company to keep the right hand on the pulse of consumers, and the left hand on the throat of competitors. The long-term forecast is sad for a company whose management does not attach much importance to reputation, taking care only of “honors and gold”. So to say, "dry the oars, sir!". Market competition is an aggressive environment in which only the fittest can survive.
“The positive reputation of the company is the most successful investment in its long-term stability,” the cherished formula for well-being sounds like this. More than once, such a statement is found in interviews with heads of major corporations.
A good reputation in business is defined as ethical and moral conduct of a company in the market, which remains outside the scope of its production activities. In fact, it is an intangible asset of an enterprise that determines the degree of attractiveness of a company.
The advantages of a good reputation are obvious. This is a long-term partnership, and more profitable investment offers, and a chance to attract highly qualified new specialists. Also, the “correct” reputation of the company is a strong motivation factor for employees already involved. There are cases of employees committing heroic acts in the name of their company (as, for example, during a fire in 2003 in one of the Koenigsegg workshops, when workers saved equipment and products from the fire without waiting for firefighters to arrive).
Well, of course, consumer loyalty directly depends on the reputation of the company. “Everyone wants to buy from the good guys,” recalls the old American slogan, which is hard to disagree with.
The risks that can be encountered when using a “good name” in competition are:
- There will always be someone who wants to tarnish the reputation of your company, which you have been creating for so long and hard. And here everything will depend on your diplomatic abilities.
- A company may be “connected” with respect to innovative activities. The existing reputation always imposes some obligations, it must be respected. If consumers and partners feel cheated in expectations, this will affect your business much worse than the machinations of “enemies”.
Of course, a good reputation is not a panacea for a headache that competitors can deliver, but it is still an effective tool that can significantly facilitate the advancement of a company on the way to its goals.