Business Competition

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Competition in business can be described as a contest or rivalry among the companies or organizations that are engaged in selling products that are similar in nature or targeting the same audience. These organizations also target the same customers for increasing their sales and revenue thereby gaining more market shares. These business organizations compete in different forms such as direct competition where the competitors are engaged in offering the same service or product.

While in the case of indirect competition in business, the marketing and goals of the business differ from that of the competitor even though the services or products offered are the same. The competition in the business often leads to infringement of trademarks or Intellectual property by the competitor business. A civil suit can be filed for such infringement against the competitor’s business and prevent such businesses from selling their product or service in the market. There are several advantages as well as disadvantages of competition in business which have been discussed below.


Competition in business is the contest or rivalry among the companies selling similar products or targeting the same audience to get more sales, increase revenue, and gain more market share as compared to others.

Types Of Business Competition

Business Competition can be categorized into three types of competitions. Following are the three types of business competitions.

Direct Competition

As the name suggests, in direct competition, the competitors of the business are in the same line of business where the same product or service is offered. When we talk about business competition, direct competition is one of the most common forms of business competition. The competitor business targets the price, service, sale points, etc. in direct competition.

Indirect Competition

In the case of indirect competition, the competitors offer the same product or service, however, their marketing and business goals differ. A different business strategy for targeting the market is adopted by the competitor business. This implies that a different kind of content marketing strategy is used for selling the product or service by the competitor business in indirect competition.

Replacement Competition

This kind of competition in business is tough to be identified as the same resources of the business’s product or service is used by the competitor but for selling some other products or services. It must be kept in mind by the businessman that customers define the competition of business. It is based on their demands and needs for which they depend on the products or services of the business. For instance, a book which is written and a video game are two different types of product. However, the target of both markets is 12 years old children. Therefore, the same intellectual creative resources are used but the product sold is different.

Thus the needs or demands of the customer must be understood before initiating any business. This will help the business to understand their target concerning the customers as well as the competitor’s target.  In a similar process, the business can target those who need first and what could be replaced with something new as well as attractive for capturing the market share. The organizations can target after evaluating the market as well as the customers.

Benefits Of Business Competition

Every organization faces business competition. Despite certain challenging characteristics of business competition, there are several advantages of competition as well.

  • Awareness - More competition in the market about a particular product would spread more awareness. The competition will make the customers more informed. The sale of the product would also increase because of the demand created by the information and awareness.
  • Price- Price plays an important role in attracting new customers. Competition drives the competitors in scaling their economies which results in lowering the price of the product or service.
  • Choice- Having options to choose from in the market helps the customers in picking up the best product or service. Thus competitors try to make their product or service unique by adding some value to it.
  • Quality- Having a wide range of products or services, makes most of the customers quality conscious. Being conscious of the quality of the product or services, the customer gets to choose the product which is more efficient than the rest in the market. This puts pressure on the competitors to put more effort and focus on the quality of the products sold.
  • Productivity and innovation - A separate budget is allocated for research and development by the organizations for business competitions and to stand out from the crowd. This helps the competitors to produce innovative products and have a unique stand in the market.

Demerits Of Business Competition

There are several disadvantages or demerits of business competition.

Due to the competition, the customers are divided based on choosing the best products or services for themselves. With huge competition in the market, the market share of the business owner reduces. The competition in business divides the market of the customers into smaller sections which makes it difficult for the business owner to have a good amount of market share due to smaller divisions in the customer’s market.

The efficiency of the employees in the business gets affected due to constant pressure on businesses for competing and creating new ideas for their products or services. It becomes difficult for the business to survive in an environment with a constant pressure of competing. 

As mentioned earlier, with demand in competition in the business, there will be internal conflicts or disputes within the business organization. Thus the efficiency of the employees is affected due to constant pressure and unresolved conflicts within the organization leads to other legal issues. 

Unnecessary business expenditure

Competition does not remain a competition anymore and thereby turns to survival in the market for earning profits. For this, the businesses require a lot of resources for expanding their business and reaching the targeted audience and making the business stand at a global level. Thus, it leads to expenditure by the organizations. In recent years, business expenses have increased a lot. 

Confusion among Customers

The business competition also leads to confusion among the customers and most of organizations are engaged in direct competition in a business that leads to the selling of the same product or services. While some customers know how to pick the best ones, other customers find it difficult in choosing the best product or service from a wide range of similar products or services.


Generally, competition is not appreciated n business, however, it is good to have healthy competition in business. It works in favor of the customers as well as the business. Healthy business competition works against the monopoly of an industry. The businesses get opportunities for introducing innovative ideas and products or services in a competitive environment. The competition in the business motivates the business to win the market share.

However, disputes arise due to competition in business as it leads to constant pressure on employees to create new products or ideas for the market. Sometimes, competition in business gets uglier when rival or competitors businesses try to destroy the deals, negotiations sales of other businesses. Various conflicts arise due to competition in the businesses whether it is internal conflict or external. These conflicts if not taken care of lead to worse situations

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FAQs On Business-Compliance

  • Research other firms in the market
  • Profiling of ideal consumer
  • Defining the brand
  • Putting emphasis on the difference
  • Focus on customer service and experience
  • Continuous development in the product 
  • Taking care of employees

If your trademark is registered, you can file a suit for infringement against any party misusing your trademark or any other mark confusingly similar to your trademark.

If the directors keep on fighting and the dispute becomes irrevocable, then the matter comes to the Court. The aggrieved director can either approach a Civil Court, Company Court on just and equitable clause or can even approach the Company Law Board.

How Lead India Can Help You?

  1. Trustworthy & Confidential - We assure you that all your personal details & documents must be kept private. We never share these details with anyone.   
  2. Expert Advice – With the expert advice from the best lawyers at lead India you will be able to keep a balance in business competition and fights at bay.
  3. Zero Stress - You do not have to worry about the paperwork & complex process at the court. Our Associate will perform all these actions at the court. 
  4. Top Quality Lawyers - Lead India will help you to choose among the best lawyers who can help in dealing the business fights as well as competitions in the market. There are different associates who work with us, you can choose a lawyer depending upon their practice area, experience & user rating. 
  5. Track Your Case - We provide you the opportunity to track your cases from the online dashboard. You can easily track your case status, payment status, etc.

Swati Singh

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