“The presence of a competitor is always beneficial to a company. Competition forces a company to change itself in ways that improve its practices.”

Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations, or reading.

The author observes that having a competition in the market is always beneficial to the company. The observation, though true in most cases, misses some important exceptions to itself.

Firstly having a competitor of nearly equal strength pressurises the company to strive to produce the goods of the best possible quality. The famous “foot-war” between two footwear giants Adidas and Nike is a classic example. Both the companies invested their resources to ensure that their shoes are better than the others’. This made the footwear market a science laboratory to provide the most comfortable shoe to the customer.In suchscenario, it’s the customer who benefits the most; though none of the companies lose the game either.

Moreover, competition also ensures that the company is under pressure to retain its employees. This precisely is the reason why the employees of a software company are taken care off well. The market is too competitive here.If a company fails to retain its best staff, the doors of the rival company are always open for it. So it’s not only the company and the customer that gains from the competition,the employee too does.

But then it’s good for the company only if the rival is almost equally competent as the company. If it’s too weak, the company may fail to acknowledge it as a serious competitor and as such fail to get the benefits discussed above.More importantly, if the rival is a bit too strong, it may wipe off the original company in the next 10 years. How good the competition could be called in that case!

Also at times instead of investing in the quality of products, company choose to overcome their rival by heavy advertisement. As an example, if we consider the cola-war, the quality of Coca-cola and Pepsi has hardly changed over all these years, but the companies try to win the higher market share by investing heavily in marketing their product.

To sum, in most of the cases, a competitior can improve a company practices, but this holds only as long as the rival is of equal strength and the company is really serious about improving its practices.

3 Responses to “Powerprep1: AWA Analysis of an issue”

  1. Thanks a lot. Your website rocks and it really helps mr in my mba prep. Am giving my GMAT o nov 20th.And these AWA responses are really of great help!

  2. Chetak Kansara says:

    Hi,
    I think the first and the second paragraphs are a bit off track. The issue here is How is the competition beneficial to a Company, not the customers or the employees. Also the position you have taken or the extent to which you agree or disagree shud be explicitly mentioned both in intro & conclusion para.

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