When starting a business, the term “competitor” is often heard. Competitors are business competitors. What is the complete understanding of competitors? Competitors seem unavoidable when deciding to start a business. In fact, when we open a new business that didn’t exist before and succeed, there will definitely be competitors who enter the business. There is no need to worry because this is a common occurrence in a free competitive market. So every businessman must have also felt it. It should be noted, competitors can not only be found in the business world, but also in competitions, sports, politics, literature, and other fields of work.
According to the Merriam Webster website, competitors are people who compete, such as rivals or people who sell the same product as other merchants. Quoting the marketbusinessnews page, a competitor is a person, business, team, or organization that competes with a person or group of people in the same business. Thus, a competitor is one or more business rivals that offer similar products or services and target the same market.
Apart from producing the same product, competitors are also targeting the same market and operating in the same industry. In fact, competitors also sell their products at the same price. Competitors are an important part of a free market economic system. This is because the presence of competitors in an industry can help lower the prices of goods and services. For example, coke companies Coca-Cola and PepsiCo dominate the global market. Both produce almost the same products and their market share is not much different. The price of the product sold is also the same and it is impossible for the product to be sold higher than its competitors. The reason is, the high price will actually make customers turn to their competitors.
Thus, competitors in the business can benefit consumers because companies will compete with each other to make products and prices that can attract consumers. In addition, when two companies compete with each other to offer similar products at the same price, it is the quality of the product that will determine which product consumers will buy. Then, the benefits of competitors are for business people, it can be a challenge to motivate yourself to be able to run a better business. For example, by making products of higher quality or providing more affordable product prices to consumers.
The presence of competitors will encourage someone to move forward. Therefore, it is necessary to know who the business competitors are in order to avoid releasing products that are exactly the same as competitors. If a competitor is absent in an industry, it can lead to a market monopoly, where in the industry there is only one company that fulfills the needs of society. This market monopoly can also occur when a company destroys its business competitors or acquires competitors.
Therefore, to prevent this from happening, the government must be present to provide regulations to approve or reject mergers and acquisitions of large companies. In addition, if a business is found to have many competitors, it means that the business has good prospects for the long term. Businesses only need to strengthen their marketing strategies and financial management in order to survive.
Type of competitor
Based on the page, competitors are divided into two types, namely:
1. Direct competitors
Direct competitors or direct competitors are both the product, market, industry, and the price offered by the company is the same as its competitors. This makes the solution to consumer problems the same as its competitors. Examples include food companies Pizza Hut and Domino’s Pizza. Both make the same product, namely Pizza and target the same consumers. The two companies also aim to meet the same people’s needs, namely food. Although the products made have their own characteristics, they are direct competitors.
2. Indirect competitors
Indirect competitors or indirect competitors are companies that provide different products or services to the same consumers. Companies compete by using their own approach to customer needs. Thus, the company’s competition in indirect competitors is to have conflicting solutions to the same consumer problem. Because, the consumer will decide which product suits their needs. For example, Domino’s Pizza and McDonald’s do not make the same product even though they both exist in the food industry. Domino’s Pizza sells pizza while McDonald’s sells fried chicken. However, both target the same consumers, namely consumers who are hungry and want to eat full but cheap. Both also aim to meet the same consumer needs.
These two food companies are indirect competitors because even though they are in the same industry and target the same customers, they both have different products to meet consumer needs. This is an explanation of what competitors are in terms of business. Competitors apparently have two different types, namely direct competitors and indirect competitors, which distinguishes them from products that are sold the same or not.