Competition is the foundation of America’s strong economic foundations. It is a driver for innovation and its very nature produces the best of humanity– but why is competition such a catalyst for growth?
Competition helps businesses avoid complacency. More often than not, businesses and even whole industries will stop innovating because of a lack of competition. Competition drives businesses and industries to innovate and create the best possible product/ service. Southwest Airlines is a shining example of the effects of competition. In the late 1960s, Southwest Airlines launched into the passenger airline industry– a fierce oligopoly, or industry controlled by a relatively small amount of firms. Their barriers to entry forced them to innovate in areas of pricing and efficiency, and for their innovative work they are now accredited to the start of LCCs, or low-cost carriers.
Similarly, competition drives individuals to strive for their own personal best. Competition is an aspect of everyday life for people– whether it is outpacing the stranger you are walking next to or outpacing your competitors in a track race, competition drives us. This same logic drives technology, entertainment, and travel conglomerate, Virgin Group to create artificial competition within their own companies. Managers within Virgin Group foster competition among their 400 some companies by comparatively measuring the sales and performance numbers of their companies, departments, and departmental teams.
Our lives are plagued by competition– but thankfully so. Society recognizes those who go above and beyond the status quo by innovating and improving, and competition among individuals and big corporations is a catalyst for that innovation. As a consumer, you will consistently notice companies within the same industry trying to outperform each other, whether it is T-Mobile VS Sprint, Apple VS Samsung, or the Cubs VS the Indians we know that competition is a driver for innovation.