What is Competition?

What is Competition?
Have you ever run a race?
Have you ever entered an art contest?
Have you ever played in a soccer game?

Races, art contests, and soccer games are all competitions. Competition is when people try their best to do something better than other people so they can win.

Today we will learn about a different kind of competition. We will learn about business competition.

In this lesson, you will identify businesses, learn that when two or more businesses sell similar items they are called competitors, and identify competing businesses in your community.

What Is A Business?
A business tries to make money by selling goods or providing a service.
Here is a list of a few businesses in your community. Can you think of more? 

• grocery stores
• clothing store
• jewelry store
• discount store
• drugstore
• car repair shop
• hair cutting salon
• doctor’s office
• dentist’s office
• accountant’s office
• dry cleaners
• bank
• movie theater

The Marketplace
In our country, we have a market economy. Buying and selling creates the marketplace. Businesses are sellers. They sell goods and services to make money. People who pay for goods and services are called buyers. Buyers and sellers come together in the marketplace.

Competition in the Marketplace
Can you think of two stores that sell candy? Those two stores are competitors. They are competing for your money. Both stores want you to buy their candy.

When two or more businesses sell the same goods or service, they are competing for the same market. When businesses compete, they try to find ways to get you to choose them. Buyers get to choose where to spend their money. This is competition in the marketplace.

Competition in Your Community
There are competing businesses all around us.

Burger, Burger!

• Burger King© and McDonalds© are two hamburger restaurants.
• Both sell soda, french fries, and hamburgers.
• Both want you to eat at their restaurants.
• Both want you to spend your money at their restaurants.Because they sell similar items, they are called competitors.

Target©, K-Mart©, and Wal-Mart©

• All three businesses sell clothing, food, and toys.
• All three offer low prices.Because they sell similar items, they are called competitors.

Can you think of more competitors in your community?

Burgers and Shoes!

• Burger King© sells soda, french fries, and hamburgers.
• ShoeTown sells shoes, boots, and sneakers.
• Both businesses want your money.

Burger King© only competes in the burger market with other burger sellers trying to attract burger buyers. ShoeTown competes in the shoe market with other shoe stores, wanting shoe buyers to come to shop. So Burger King© and ShoeTown are not competitors: They and do not compete in the market for the same customers.

Interactive Activity: Let’s Find the Competitors!
Many businesses are listed in the yellow pages of the phone book. These businesses want people to shop at their stores. Some of the businesses have competition. Let’s look at the yellow pages for Smallville. Do you think you can find the competing businesses? Click here to look at the Smallville Yellow Pages!

Let’s Think!
As a class, discuss the following questions:

1. What are businesses?
2. What is the marketplace?
3. Do Sears, Pizza Hut, and Joe’s Car Repair shop compete in the same markets?
4. If not, who does compete in those markets?
5. Name competitors in your community. How do you know they are?
6. What are some ways competitors try to get your business?

Thank you for learning about competition in the marketplace. If you would like to read what some teen business owners say about competition, your teacher can direct you to several online articles.

Print your results from the interactive activity, “Smallville Yellow Pages” and turn them in to your teacher.

Test your knowledge about competition by completing Competition: Pizza!