Question:
The presence of a competitor is always beneficial to a company. Competition forces a company to change itself in ways that improve its practices."
Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations, or reading.
Answer:
I agree that competition is beneficial to a company. Competition can be viewed as a threat, and most companies do not want to have a competitor, especially a competitior that is on the same level as the company.
A competitive atmosphere forces a company to be innovative. The urge to be an industry leader forces more money into product development. For example, the company I work for has a huge competitor, our company is currently at the number two spot. In order, to be an industry leader our company has created a product that no one else has in the industry. This product will bring customers to us, because they can't get it anywhere else. The product is beneficial to the customers bcause it saves them money and get their product out in a timely manner. In the end our company makes 20% more profit, and will probably be the industry leader. If not for the competition that was high, losing our customer to the competitior we will not have made a bold move to improve our product.
Also, competion allows a company a measure. you are able to measure your efforts, products,, profits etc against someone else. It allows you to know your position in the industry. And offers you incentives to improve, and change practises. For example, blockbuster was almost a monopoly in the video rental industry. Along coems netflix.com a online company that offers no late fees, convinence and instead of paying every time you rent a movie, netflix offers one time monthly fee. This was a huge change in the video rental industry, Blockbister was forced to respond, I have not seen a change in blockbuster ever since I've known blockbuster, nothing was different, until netflix started acquring a large customer base. Blockbuster, has now admister a 'no late fees' policy, in other to retain their customers and/or attain netflix customers. Also, a custoemr can now rent movies online at blockbuster.com, and have the movies deliver to their homes. Blockbuster is a big company, more resources than netflix, and more customer base than netflix. But in order to make a move and in order to see opportunities in the market place, a competitior like netflix had to come up.