6 Reasons Why Startups Can Benefit from ‘Healthy’ Competition

A little competition is good for you. Here are six smart reasons why every startup can benefit from healthy competition in the marketplace.

4. Create and maintain brand equity.

A competitive marketplace compels successful entrepreneurs to develop a unique value proposition and differentiate themselves from a sea of look-alikes; in essence, to develop a brand. As you conduct branding activities to set yourself apart, you will inherently build brand equity – “the value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent (Source: Investopedia).”

Brand equity is important because, as NetMBA.com explains, it: “a) facilitates a more predictable income stream, b) increases cash flow by increasing market share, reducing promotional costs, and allowing premium pricing, and c) is an asset that can be sold or leased.” Simply put, brand equity has a multitude of benefits.


5. Identify the weakest ‘supply chain’ link.

As competition increases, you’ll seek out ways to level the playing field. For many businesses, the quickest way to do so is to shore up their supply chain: the means by which you produce and distribute products and services.

American industrialist, and Ford Motor Company founder, Henry Ford once suggested “competition is the keen cutting edge of business, always shaving away at costs.” Strong competition will inevitably make you review, optimize and cut back on this important cost center (i.e., purchasing, production, warehousing, inventory and transportation).


6. Sustain a competitive advantage through innovation.

Most importantly, competition is healthy because it will implore you to become more creative.  Theoretical physicist Albert Einstein once advised, “Logic will get you from A to B. Imagination will take you everywhere.” Most entrepreneurs will agree that creativity is often revealed through challenges.

Competition at its core is a tremendous challenge. For example, when competitors erect new barriers, you’ll need to creatively move around and through them. When copycat products emerge you’ll need to creatively combat them. Or when customers, or legislation, force down prices you’ll have to creatively protect your margins. Essentially, many companies – whether they admit it or not – may owe their innovative nature to pesky competitors.


Every small business is impacted, directly or indirectly, by competition. The goal, however, is to strategically leverage healthy competition; turning every rock thrown into a stepping stone — that will inevitably lift you higher!

So, let the games begin.


© YFS Magazine. All Rights Reserved. Copying prohibited. All material is protected by U.S. and international copyright laws. Unauthorized reproduction or distribution of this material is prohibited. Sharing of this material under Attribution-NonCommercial-NoDerivatives 4.0 International terms, listed here, is permitted.


In this article
Copy link
Powered by Social Snap