What is direct competition? Definition
Direct competition occurs when two or more companies offer essentially the same product or service in the same place, or which is available in the same place. The companies compete for the same market.
Direct competition contrasts with indirect competition. The latter occurs when two or more companies offer 2 different products or services, but which can be substituted for each other.
Examples of direct competition
Direct direct competition commonly found in everyday life.
Take smartphones, for example. Virtually every company on the market offers the same product, namely a smartphone. Apple’s iPhone, Samsung’s Galaxy and Xiaomi’s Mi are all in direct competition. They’re all smartphones offering more or less the same features, at fairly high prices.
Brands try to differentiate themselves from other brands by being very active in marketing and by offering products that are a little different from other brands. As we can see with Apple’s smartphones, the brand plays the differentiation card to the maximum to justify the price of their phones and stand out from the crowd.
Another good example of indirect competition is Burger King and McDonald’s.
What is the purpose of competition?
When the market is competitive, companies have a greater incentive to lower prices, improve product and service quality, and offer customers more choice. In other words, companies have to innovate to make their products different and better than others.
In short, consumers end up with better products that cost the same, or even less, than those that came before.
English translation of direct competition
The English translation of direct competition is concurrence directe.
