Why is Competition Important for a Country’s Economy?
Competition ensures a single brand does not dominate the free market, and consumers benefit from various deals. Avoiding market monopoly is not easy when one huge brand controls several other small brands through constant merger and acquisition. Intense competition and fair chance enhancing policies must keep a country’s economy strong and fulfill versatile customer needs.
Competition is the critical factor protecting the safety of the customer and their rights to get maximum value for their money. Competition ensures customers get high-quality goods at a lower price as each brand tries to attract more customers. Customers get the upper hand in the market as they have the power of choice and get better service.
OpEx Learning trains business executives to achieve operational excellence and perform better than their competitors. The courses train the businessmen to strive for continuous improvement, which will help them gain a competitive advantage over their peers quickly. Customers benefit through healthy competition as brands try to improvise themselves, constantly supplying them better products.
Pave the way for innovation
Innovation occurs only when the industry has stiff competition, and each brand thinks creatively to impress its customers. From the very first automation process to the latest designs in fabrics and new features in electronic gadgets, competition always drives the need for innovative solutions. Michael Porter places competitive rivalry as the central point of his world-famous Porter’s Five Force’s Theory.
The power of suppliers and the power and threat from the new entrants and the substitutes revolve only around competition. Innovation is a tool to serve the customer better than the competing company through better marketing, better pricing, and better product features. A nation’s economy improves automatically when the customer’s buying power increases.
Building better business processes
The business process started when the world’s first transaction started getting recorded. Accounting and bookkeeping were the first business process to get documented, and modern technology uses AI to create advanced business processes. All the recording and data collection is to increase sales and beat the competition.
No company would indulge in collecting big data or giving importance to data analytics without tough competition. The past two decades saw an enormous increase in business intelligence tools only because of the tough competition in every industry. Defined business processes led to better education and training, contributing to more skilled labor and creating well-settled families, improving the country’s economy.
Redefining industry standards
Competition redefines industry standards from time to time, and it happens frequently. Regular mobiles were made outdated through smartphones, and the dingy old TV set is now a sleek and beautiful internet-powered streaming device. From automobile to electronics, housing, and FMCG products, every industry has seen revolutionizing products introduced in the market.
The basis of creating such products is innovation, and good business process management makes developments possible. But only competition establishes a market for them as each company strives to create something splendid to attract the customers and prove they are better than their rivals. Redefining industry standards provides more employment and helps in improving the economy of the country through indirect jobs.
Better market power
Every government must maintain a fair market policy that encourages competition and crates better market power. The customer will have the last say, and the companies will get forced to abide by the rules and think in terms of societal benefits too. Creating a solid market without a monopoly and safeguarding all entrepreneur’s interests helps create more responsible businesses.
Corporate social responsibility, green packing, sourcing raw materials according to fair trade policy – everything gets done in an intensely competitive market. The companies do it to make the customers understand they are responsible and better than their competitors.