Competition is a situation in a market in which enterprises or sellers independently strive for the patronage of buyers in order to achieve a particular business objective, e.g. profits, sales and/or market share. Competition in this context is often equated with rivalry. Competitive rivalry between enterprises can occur when there are two enterprises or many enterprises. This rivalry may take place in terms of price, quality, service or combinations of these and other factors which customers may value. (The World Bank, OECD, 1999). Such a competitive situation may also be effected by “market contestability.” That is, competition also comes from enterprises or sellers that could enter the market.
Competition is not just about the behaviour of enterprises in the market, but produces significant benefits to the consumers, business community and the country as a whole. The most obvious benefits of competition is that it results in goods and services being provided to consumers at competitive prices, better quality and consumers have wider choices.
Competition has a positive impact, not only on the well being of consumers, but also on a country’s economy as a whole. Competition bolsters the productivity and international competitiveness of the business sector and promotes dynamic markets and economic growth. Competition in the local market will also enhance the competitiveness of local businesses and products in regional and international markets which are paramount to Seychelles new emerging market economy. Competition can also play a vital role in creating the conditions necessary to attract inward investment and capital for the development of the country.