Businesses, like runners, thrive on competition – at least, most do |
Businesses, like runners, thrive on competition – at least, most do
May 22, 2026 — 5:30am
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I’m no speed demon when it comes to running. I might be chipping away at my personal bests, but I’m reminded – during many of my runs – that there’s always someone faster, stronger and fitter. Sometimes, they’re kind enough to cruise along beside me to the soundtrack of me gasping as I try to keep up. Other times, we struggle together with neither of us wanting to let the other get ahead.
For some, it’s just about competing with themselves or doing it for fun. But often, without someone to challenge us, improvement comes more slowly – or we might not realise just how far we can push ourselves when someone else is hot on our heels.
It’s the same for businesses. They don’t run marathons, but competition helps us get the best out of them and race towards finding better ways of doing things.
We often see the push for stronger competition as a fight between customers – who want the best prices or quality (and therefore want to see firms to fight it out among themselves) – and businesses trying to maximise their profits. But it’s not as black and white as that.
As Luke Woodward, a commissioner at the Australian Competition and Consumer Commission, spelt out in a speech last month, customers have a lot to gain from stronger competition because when a bunch of companies are fighting hard against each other, they tend to drive down the prices they’re charging or ramp up the quality of the good or service they’re providing to win over customers.
When competition is weak – for example because there’s only a small number of big firms that know they’re better off co-ordinating their prices (it’s much harder to get hundreds or thousands of businesses to agree to keep their prices the same) – customers get a worse deal.
But here’s the thing: a lot of businesses actually lose when competition is weak.
But wait, don’t businesses want less........