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Business Competition

Business competition is the rivalry between business firms. The competition between the

business firms may include the market share, profit, and sales volume that when adjusted, the

products, price, and services1change for strategies. Indeed, the business competition may be good

for the business firms to make improvements and lead to the product innovation. Meanwhile, it

can bring great drawbacks. (Fleisher & Babette).

Content

-Strategic planning and competition

-Business competition advantages

-Testing the Products or Services Efficiency

-Business competitive disadvantages

- What business firms focus on in business competition

1 Fleisher, Craig S., and Babette E. Bensoussan. Strategic and competitive analysis: methods and techniques
for analyzing business competition. Upper Saddle River, NJ: Prentice Hall, 2003.
http://s3.amazonaws.com/academia.edu.documents/43574058/Strategic_and_Competitive_Analysis_Metho20
160309-24744-2edsct.pdf?
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%2BEHQpSZweG9cdS1w%3D&response-content-disposition=inline%3B%20filename
%3DStrategic_and_Competitive_Analysis_Metho.pdf
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Strategic planning and competition

Appropriate strategic planning is crucial for most of the business firms before they start their

business. The process to start the business firms is a lot of effort and time to compete over the

competitors. Therefore, the competition plays an important role in helping the business firm

examine the impact and find out the balance between the business and the governments policy.

Lack of competition within the business market and business firms will lead to higher product

prices and costs. There is a need for a competitive environment between the business firms, in

order to have sustainable growth. Business competition may help the firm learn how to survive

from its competitor 2 (Elis).

Business competition advantages

2 Elis, Karen. Making markets work: can you compete with the elite? 2009
https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/3647.pdf
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The marketing promotion activities that used by business firms increased the trend of
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competition in the business market. Kelly & McGowen define the consumer promotion as

"marketing activities designed to generate immediate consumer sales such as premiums,

promotional products, samples, coupons and rebates may trigger the competition among the

business firm. (p. 186)." Many business firms use marketing campaigns to attract consumers and

create ongoing future business. That is why you may always found many special offers on each

malls advertisements. Such a competitive environment creates more opportunities for the

business firm to attract consumers attention and increase sales volume. The business firm

competition allowed the firms to have more distribution and marketing channels to promote their

products (Kelly & McGowen).

Testing the Products or Services Efficiency

Competitive marketing campaigns will boost the sales and allow related parties to test the

products or service's efficiency. The competitive environment motivates the firm to make

improvements; in terms of production and distribution. The competition may create an incentive

for the company to added value to a product or service: increase the utility. The utility can

influence the market through creating a series of competitions among retailers. More specifically,

the products are manufactured and delivered to the retailers with their own utilities, but retailers

can add additional utility through marketing, customer service and business practices. For

instance, cosmetic products of any brands are manufactured and sent to all kind of beauty shops.

3Kelly, M. & McGowen, J. BUSN Introduction to Business, Chapter 12, Production and
Promotion: Creating and Communicating Value, pp. 167-187, Mason, OH, Cengage Learning.
2012.http://swynnbrown.webs.com/Chapter%2012.pdf
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These shops increase the selling prices of products since they would offer the free shop spa

treatment and service in line with the products. Such situation presents when the company is

forced to employ the pricing strategy to compete against their competitors. The retailer must do

whatever possible to maximize its greatest profit margin. Most companies influence the

consumer buying decisions such as the reputation, location, convenience, etc. This creates the

opportunity for companies to focus on marketing its strengths. The utility formed by the business

competition may motivate the companies to ensure every single process runs quickly and tests

each products or service's efficiency4 (Godfrey).

Business competitive disadvantages

Sometimes the business competition may be good for business firms to compete against each

other. However, the competition created negative impacts to the business firm. Ferris (2010)

stated that the competition among the business market not only improved the corporate

performance, but also corrupted ones moral code. The competitor want to succeed at any cost.

The competition triggered the ethical issues. The rivalry upon the competitors increased the

chances for the employees, and employers to behave unethically or irrationally (Ferris). The

engagement of unethical behavior, such as the sabotage, deception, cheating, etc, relatively

increased when the company faced intense competition from their competitors. Thus, it is not

appropriate for corporate to emphasize the strategic plan in order to compete with the competitor.

They should consider the moral issues triggered by business competition.

Business competition is a double-edged sword. The business firm should not focus on the

competitive advantages and neglect its negative impact. In fact, the competitive environment of
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Godfrey, Nick. Why Is Competition Important for Growth and Poverty Reduction?
OECD. 2008. http://www.oecd.org/investment/globalforum/40315399.pdf
 5

business firms not only corrupts the moral code but also causes the engagement of expensive

marketing campaigns to outdo their competitors. The company may need to spend extra revenue

on their social media platform or media to promote their products and services due to the

corporate competition. Therefore, the business competition may heavily impact the corporate

financial status and lead to a financial crisis (Pine).5

What business firms focus on in business competition

According to the article, Why is Competition Important for Growth and Poverty Reduction?,

Nick Godfrey indicates that business firms primarily focus on the elements that influence

consumers' decision-making. Elements of consumers decision-making include the cultural

elements, social element, and psychological elements. The cultural element is defined as the

culture, subculture and social class of consumers. The social elements are family, friends, and

reference groups, but also psychological elements including motivation, attitudes, perceptions

and learning. The competitive environment among the business firm caused corporate to put

additional effort on the element that influenced consumer decision making.

In the article, Mass customization: the new frontier in business competition, Pine conclude that

the negative impact of the business competition may outweigh its incentive to motivate the

business firm to make improvement sometime. The business firm should not focus on the

Pine, B. Joseph. Mass customization: the new frontier in business competition. Harvard
Business Press, 1993. https://books.google.com.my/books?hl=en&lr=&id=Seli55Gt-
sEC&oi=fnd&pg=PR9&dq=business+competition&ots=5gRBGZGLPn&sig=0PLmBjRXOTEO
Z42WLYdxulWVGjo&redir_esc=y#v=onepage&q=business%20competition&f=false
 6

competitive advantages and neglect its negative impact. The business firm should balance the

impacts causes by the competition. In fact, it is also important for the business firms to carry out

appropriate strategic plans to promote their products and services. The strategic plan may help

the business firm shed light on how to step over its competitors.

References

Elis, Karen. Making markets work: can you compete with the elite? 2009.

https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/3647.pdf

Godfrey, Nick. Why Is Competition Important for Growth and Poverty Reduction?

OECD. 2008.

http://www.oecd.org/investment/globalforum/40315399.pdf

Jabr, Ferris. Meeting Your Match, Scientific American Mind. Vol. 21 Issue 5, p42-45. 4P 2010.

https://www.google.com.my/?gws_rd=ssl#q=Meeting+Your+Match

%2C+Scientific+American+Mind
 7

Kelly, M. & McGowen, J. BUSN Introduction to Business, Chapter 12, Production and

Promotion: Creating and Communicating Value, pp. 167-187, Mason, OH, Cengage Learning.

2012.

http://swynnbrown.webs.com/Chapter%2012.pdf

Pine, B. Joseph. Mass customization: the new frontier in business competition. Harvard Business

Press, 1993.

https://books.google.com.my/books?hl=en&lr=&id=Seli55Gt-

sEC&oi=fnd&pg=PR9&dq=business+competition&ots=5gRBGZGLPn&sig=0PLmBjRXOTEO

Z42WLYdxulWVGjo&redir_esc=y#v=onepage&q=business%20competition&f=false

Fleisher, Craig S., and Babette E. Bensoussan. Strategic and competitive analysis: methods and

techniques for analyzing business competition. Upper Saddle River, NJ: Prentice Hall, 2003.

http://s3.amazonaws.com/academia.edu.documents/43574058/Strategic_and_Competitive_Analy

sis_Metho20160309-24744-2edsct.pdf?

AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1487939966&Signature=2uyVt6

TGQRq%2BEHQpSZweG9cdS1w%3D&response-content-disposition=inline%3B%20filename

%3DStrategic_and_Competitive_Analysis_Metho.pdf