A competitor is an individual or legal person that competes within a given market, offering goods or services in order to obtain an economic benefit.
In general, when saying that it can be an individual person, we refer to a subject who offers his services in the labour market, seeking to obtain a job placement and receiving remuneration from the respective salary.
While, when speaking of a legal person, we are speaking of a constituted and registered company that offers goods and services in the product market, what a competing company wants is for consumers to prefer the goods and services they sell in the market. and thus be able to obtain profits.
What happens when there are many competitors in the job market?
Either way, the existence of many competitors in the labour market, it will have effects on both companies and workers.
1. Effect on workers
Indeed, when there are many competitors in the labor market, individuals must have sufficient skills such as skills-based on knowledge, attitudes, techniques and procedures that allow them to better develop their work.
On the other hand, if a person possesses greater competences, he will be able to obtain better job positions and, consequently, better wages. Therefore, it is essential for workers to study, train and gain experience so that they are better value in the market.
2. Effect on companies
Then, for companies, the fact that there are many workers in the labour market allows them to choose the best workforce that helps the firm to be more productive, more efficient, and therefore achieve better profit margins.
It can also help you establish more competitive wages based on the skills and competencies that workers possess.
What happens when there are many competitors in the market for products or goods and services?
In relation to the product market, the fact that we find many competitors has an impact on companies and consumers.
1. Effect on companies
Of course, in this case, the companies act as competitors in the sale of products, which can be goods or services. Therefore, companies must strive to continually improve the quality and price of their offers.
In any case, the more competition companies they make more efficient, more competitive and productive what favours the conditions of the economy allowing for more efficient use of resources and productive factors that are always scarce.
2. Effect on consumers
In reality, consumers, when there are many competitors in the product market, can obtain the possibility of having more freedom and more options to choose the products they will buy in the market.
Consequently, this means that consumers benefit from a greater number of competitors. In other words, companies that want to achieve their preference must continually strive to offer their best proposals.
Finally, we can see that competitors are very important both in the labour market and in the product market. To the extent that there are enough competitors, the benefits in any of the markets are very evident, since it means that both individuals and legal entities or companies are continually improving and innovating their practices and capabilities. If there is an excess of them, in the case of companies it causes closings and bankruptcies, and in the case of employees, it causes unemployment.