Businesses compete with each other by establishing the best price, giving value for their products, making their business convenient for the customer, establishing a sense of trust and practicing corporate responsibility. Through competition, businesses are able to innovate and deliver better customer service.
There are five key ways businesses compete with each other:
- When setting prices, they ensure it is right for their products and services. This does not always mean aiming for the cheapest price, just finding the most appropriate one.
- In order to justify their price and get an edge over their competitors, businesses try to offer the best value. This can mean shopping incentives, money-off coupons or buy-one-get-one-free offers.
- Businesses also aim to ensure their operations are as convenient for their target market as possible. For physical businesses, this can mean longer store hours to attract people who work long hours.
- It is important for businesses to establish a sense of trust. Some achieve this by opening themselves up to reviews, which other customers then use.
- Some businesses may also choose to engage in social activism to draw positive attention from their customers.
Competition between businesses is healthy. When businesses compete, they spur innovation within their industry and they improve customer service.