One of my partners used to always assume that competition from one of our big national healthcare competitors was always a bad thing for our business. Sometimes he was right, but often our business would actually improve in the face of that competition.
The competition would bring more attention to us. If we had a new service, the competitor was able to bring attention to that new product or service for all of us in that market space.
The large company also gave us something to compare our offering to when selling to potential customers. We could differentiate the benefits we could offer when compared to that competitor.
Having the large competitor in our market also kept us on our toes. I know we all performed better knowing that we had to compete for each and every customer.
Andy Tabar sent along a story about how Starbucks seems to have the same positive effects on independent coffee shops in some markets. From CoolCleveland.com:
"Having Starbucks around seems to make local businesses more unique," she says. "After they opened on Lee Road, that's when we started turning a profit."
Independent coffee shops benefit from being close to Starbucks, Wilson-Jones says - the chain gives the local shops something to compete against, and much like a neighborhood densely packed with good restaurants, consumers flock there for coffee. She knows that Starbucks helped to create a market for her product.
