What does competition in business refer to?

Competition in business refers to the rivalry among companies aiming to attract customers and gain market share. This dynamic is a crucial component of a market economy, as it drives businesses to improve their products and services, innovate, and maintain pricing that appeals to consumers. When businesses compete, they work to outperform one another in various areas, such as quality, price, marketing strategies, and customer service.

This rivalry encourages efficiency and can lead to better choices for consumers because companies are motivated to meet the needs and preferences of their target markets. Essentially, competition leads to a vibrant market where businesses must continually evolve to retain and grow their customer base.