As Jim explains in this short video, competition basically involves rivalry among sellers in a market. Each tries to increase sales, profits and market share, by varying the marketing mix of price, product, distribution and promotion. However, not every rival will enjoy competitive advantage.

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VIDEO CHAPTERS
00:00 Introduction
00:15 What is competition?
01:44 Ways competition can affect a market
02:55 What is competitive advantage?
04:10 Potential ways to gain competitive advantage

VIDEO SUMMARY

This video is about how competition affects businesses operating in a market.

The video starts by explaining what competition is. Competition is rivalry between businesses in a market. Businesses compete to grab their share of the available demand, which translates into sales and profits. Competition can be direct, like pizza delivery businesses competing against each other, or indirect, like pizza delivery businesses competing against other take away food businesses.

Businesses use different ways to compete. One way is to compete on price by offering the lowest price in order to capture the highest share of the market. Another way is to compete through innovation by developing new products or services. Businesses can also try to differentiate their product by building a brand or by offering exceptional customer service.

The key to succeed in a competitive market is to have a competitive advantage. Competitive advantage is when a business is able to add more value to its customers than rivals. There are many ways to achieve a competitive advantage, such as becoming more efficient than rivals, delivering high quality products or services, or providing exceptional customer service. Businesses that succeed in markets generally have competitive advantage in one or more of those ways.

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