Why Competition is Good in Business Essay Example | Topics and Well Written Essays - 750 words

Why Competition is Good in Business - Essay Example This paper illustrates that the tendency to compete with rivals to become superior can be identified in human beings right from their childhood. They try to take several approaches in order to face the competition from the real world. Sibling rivalry, reward from little things and development of new skills from competition help the children to sense the urge of competition right from childhood. An organization needs to distinguish itself from the competition through industry analysis, outshining competition, focus on effective customer service, and development of business operation opportunities. It is true that feelings of competitors can change the behavior and thought process of individuals. According to the social psychology competition helps to improve overall individual performance. Sometimes it can hamper performances. The role of technological innovation is pivotal to foster the overall business growth. The key driver for innovation is competition between the companies. Compa nies need to develop new ideas to maintain its competitive advantage over other rivals. Business organization is pushed by competition to innovate and gain profits from their innovation. The drive of competition is to develop new product and increase market share of a company. Innovation can lead to product diversification, increase of competitive advantage, upsurge of profit margin and fulfillment customer needs. If a company is only a single player in the field, it becomes quite difficult to innovate. Company working in a crowded market must be forced to innovate to be distinguished from other businesses. Company can be over-reliant on new products which can eventually lead excessive expense of marketing. During the product lifecycle, innovation can imply huge investments and it cannot be paid back. New technology can often lead to significant upfront in expenditure.   Small organization may not have the resources to innovate new products.   Over dependent on innovation can so metimes be a downside which is hard to overcome.