Competition
—the Motor of Economic Growth
Abstract
In this increasingly globalization world, international competition in the field of economy and trade is becoming more intense than ever before. It has become increasingly difficult to think of industries that have not been thoroughly influenced by internationalization. Economics could be referred to as the science of competition. Sustaining a competitive edge depends on a company’s ability to learn and innovate.
Key words: international competition; internationalization; competitive advantage
International competition in the field of economy and trade is becoming more intense than ever before. It has become increasingly difficult to think of industries that have not been thoroughly influenced by internationalization. Competition is also the motor of economic growth, both for the economy as a whole and for the individual firm.
Humans are constantly endeavoring to increase and improve their means in an attempt to satisfy their unquenchable wants. Scarcity of resources and the abundance of wants lead individuals and organizations to become rivals. In this sense economics could referred to as the science of competition.
Almost everyone is in constant competition with a large number of parties in the environment. At the micro level, competition is the force that motivates companies to search for innovative ways to achieve the same results with less inputs and to achieve better results with the same inputs. At the macro level, competition ensures that only the fittest companies survive in their continuous struggle to upgrade the use of their resources. The state of competition in an industry depends on five basic forces: threat of new entrants, bargaining power of suppliers, rivalry among existing competitors, bargaining power of buyers, threat of substitute product or services. In every industry, whether national or international, these forces determine the dynamics of competition and...