Competition refers to a contest or rivalry between two or more competitors. In business and marketing, competition is a situation in which one company tries to be more successful than another. Companies compete against other companies to generate more sales, increase their revenues and gain more market share. They compete for price, quality, design, sales, location, marketing, and other areas.
Healthy competition is important for a company and can benefit buyers, sellers and the market in general. Indirect competition is a type of competition in which companies sell products or services that are not necessarily the same, but that meet the same customer needs. Many companies spend a lot of money on marketing to ensure that their products and services have a competitive advantage. Replacement competition occurs when companies have the ability to replace a company's offerings by providing new solutions.
The way a company decides to market its products or services can help give it an advantage over its competitors by demonstrating its greater global value. Perfect competition is a market structure in which many companies sell similar products and services and benefits are virtually non-existent due to high levels of competition. Direct competition is a type of competition in which companies sell the same product to the same customers and compete for the same market. Indirect competition occurs when companies sell a similar product or service that meets the same customer needs.
Direct competition causes companies to sell the same product or service to the same customers with the same needs.