Competition, like supply, covers a broad range of topics that may be not be immediately obvious. Competition from other businesses may be a negative. But, competition across a range of suppliers can be positive in helping to keep costs down and margins up. Competition should be assessed in terms of industry, location, premises, plant and equipment, people and that the availability of funding, as well as those more normally considered.
Ease of entry into the industry can place constant pressure on price margins. But, capital costs can limit entry and be positive.
Businesses who have built a strong position in a niche probably have a good defence against competition. It’s something small operations should strive for, rather than participating in the same industry sector as larger players.