Business Competition Part 2

Published April 30, 2014 by Mayrbear's Lair


Competition is the component that makes a firm unique and is effective in determining their competitive advantage (Coulter, 2010). By understanding the competitive environment, key strategic decision makers are in a better position to create the strategies required to stand out above their competitors and outperform them. This falls in alignment with the concept that businesses that are committed to adjust their strategies and continue to evolve to keep up with the market, are in a better position to grow, than those that remain stagnant because of their inability to embrace improvement or, are incapable of finding creative means to continue to develop or improve their strategies and operations.


Without the element of business competition, companies would not need to create strategies to achieve success. Magretta (2011) explains that the most common mistake leaders make about the concept of competition is that success is achieved by being the best at something. Although this is an important component, a more effective strategy is determined by the ability to pass the following five basic tests:

  1. Is the firm creating value, which is at the root of development and helps establish a distinctive value proposition that will translate into different activities and abilities from rivals?
  2. Is the development of a tailored value chain unique to that firm?
  3. Have they developed strategies that offer compromise or trade offs, by saying no to some clients, for example, to serve others better?
  4. Do the strategies fit, relate to one another, and are they sustainable and functional?
  5. Is the company capable of continuity and how adept is the firm at keeping up with industry changes (Magretta, 2011)?


Asking these five questions can help identify components that are effective for companies in their efforts to establish competition in a business arena. In other words, business leaders, key decision makers, and strategic planners who create a competitive advantage as a strategic weapon of choice, are in a better position to stand up to industry rivals. In conclusion, developing an effective business competition strategy is the key to creating value that in turn, helps make a firm unique.


“Intuition is a sense of knowing how to act spontaneously without needing to know why.” ―Sylvia Clare


Coulter, M. (2010). Strategic management in action (5th ed.). Upper Saddle River, NJ: Pearson Education, Inc.

Magretta, J. (2011). Understanding Michael Porter: The essential guide to competition and strategy. Boston, MA: Harvard Business Review Press.

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