competition

  

Definition

Economics: Rivalry in which every seller tries to get what other sellers are seeking at the same time: sales, profit, and market share by offering the best practicable combination of price, quality, and service. Where the market information flows freely, competition plays a regulatory function in balancing demand and supply.

Use competition in a sentence

  • The company was under serious competition from overseas companies which could manufacture a similar product for much less thanks to lower employee wages.

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  • All of the people involved in the competition had been preparing for weeks with the hopes of coming out on top.

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  • The competition we experienced when entering the market place was thrilling enough to ensure that we would stay for a long time.

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Notable Quotes

  • What differentiates your product from competitors'?
    "Few companies can rely on--let alone afford--clever marketing schemes to separate themselves from the competition. Yes, Starbucks made people believe they wanted $4 caffeinated concoctions, and Louis Vuitton lulled people into shelling out $1,500 for denim handbags, but those are the exceptions that prove the rule. If you want to win in business, you need to offer something tangibly valuable that the competition doesn't. Examples: rock-bottom prices (Wal-Mart); ingenious product design (Apple); extreme convenience (Fed Ex)."
    - Brett Nelson
  • How big is the threat of new entrants?
    "If you're smart enough to spy a profitable business opportunity, you can bet competition isn't far behind. Some barriers to entry--patented technology, a storied brand--are more fortified than others, but eventually someone will find a way to do what you do faster, cheaper and maybe even better. If not a direct competitor, then a substitute technology might take a chunk out of your hide. (Think what digital film did to Kodak.) The trick: building a loyal following before that happens."
    - Brett Nelson
  • Competition and Maintaining Growth
    "Internet companies are on a treadmill where you need to move forward just to remain in place. If what you offer isn't getting better every year, existing and new competitors will pass you by."
    - Tom Murcko
  • Why Didn't Netscape Win the Browser Wars?
    "In the early days of the web, Netscape was the dominant browser. Why wasn't it able to maintain that dominance? There are numerous reasons: 1. Switching costs were low. The products were free, simple, and similar, and were easy to switch between. 2. There was a high degree of compatibility: web pages displayed almost the same way regardless of which browser was used. 3. There weren't substantial network effects. In other words, one person didn't benefit from using the same browser that another was using. Collectively these facts made it easier for Microsoft to leverage its dominance on the desktop to quickly gain browser market share."
    - Tom Murcko
  • How much power do your suppliers have?
    "Convincing customers to buy your products is tough enough without suppliers giving you a hard time. Basic rule of thumb: The fewer the number of suppliers, the more sway they have. Take the steel industry, which relies on a handful of companies for its iron feedstock. If two of those big guys should get together--as BHP Billton and Rio Tinto have been discussing--they would have significant pricing power, potentially crimping steel producers' margins. On the flipside, beware getting hooked on low-cost providers who don't keep an eye on quality. ("Lead-laced" Barbie, anyone?)"
    - Brett Nelson
  • A Retrospective Look at One CEO's Statement
    "I'm in a race to take CBS out of business.... That's why we're going to make the big bucks. (Josh Harris, founder of the streaming media company Pseudo.com, which went out of business a few months later)"
    - Josh Harris
  • One Perspective on Who to Be Worried About
    "Two kids in a garage-that's who we're most worried about. (Christos Cotsakos was a CEO of E*Trade"
    - Christos Cotsakos

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