Why competition is healthy for business

What is your idea of competition? Are you empowered and motivated by competition, or not? Are there any benefits to competition? Is competition healthy?

The Traditions of American team at last year's ceremony, with smiles and seven fingers raised in celebration of their seven Best of 50+ Housing Awards.

It’s sometimes comical to find business managers giving all sorts of reasons as to why they cannot do this and the other-because of competition. Is there really any business in this world without competition? Monopolistic tendencies have long gone and the current business world is about competition. If you must exist and thrive, you must compete. Period. But what can you gain from competition?

Competition provides learning opportunities. Successful business builds on strengths, and deals with weaknesses by studying competition. Why not benchmark yourself with the best-in-class or market leaders, for example? Competitive analysis is a good learning opportunity for you. It sharpens you.

Creativity and innovation results from competition. If you have ever suffered in the hands of a monopolistic corporation- where your value as a customer hardly exists -then you know what I mean. Competition makes enterprises think out of the box. Aspects of quantity, quality, price, availability, speed, customer care, etc. come into focus where competition is tough.

What about differentiation? Competition enables you to identify and make use of your point of differentiation and this gives you a competitive edge. What makes you unique? Why should people come to you and overlook the rest? How can you prove you know your trade without competition? Now, without competition you tend to become complacent-and this is very dangerous.

What about the human capital pool? While direct poaching of staff from your competitors may not be a smart thing, competition helps build human capital and your enterprise can benefit.

When various players in an industry come together in associations and networks, it’s an opportunity for, at the very least, knowledge expansion. Your enterprise can gain from such groups. For example, the government can pay more attention to policy issues coming from an association, than from an individual. You can also share resources where applicable. Interdependence is more valuable than independence.

The National Association of Home Builders (NAHB) the country’s oldest association, is just one such group, and its competitions for design, construction and marketing product are just one way to stay at the top of your game and rev up business.

Nathan W. Jameson, director of operations for Traditions of America, is a true believer. He set a high bar with his company’s seven 2012 Best of 50+ Housing Awards from NAHB (www.nahb.org/50PlusAwards). Headquartered in Radnor, Penn., Traditions develops and builds active adult communities throughout the state.

Jameson and company are savoring the sweep: “Traditions of America heavily markets our seven national awards in brochures, print ads, and direct marketing for all our communities. We include it on webpages and ads. It’s a timely marketing hook that gives us added visibility.”

Jameson thinks the Best of 50+ Housing Awards give the company tenability, and can actually elevate sales. “Being a winner gives us credibility with our older home buyers- it’s a kind of a national seal of approval that Traditions of America is a developer of the highest quality.” In 2011, Traditions had 149 new contracts. Comparatively, year to date the company stands at 189.

Competition is healthy, and the proper competition can even be lucrative.

Authors: Clayton Mwaka, Amy Martino