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What is Asymmetrical Competition?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 01 December 2016
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Asymmetrical competition is a term that indicates direct competition between two entities that are not necessarily utilizing the same type of resources or approach in order to achieve a similar result. In the business world, asymmetrical competition has always been a part of the process of competition. In recent years, the phenomenon of unequal division of resources amongst competing entities has become increasingly common as new ideas about business models, corporate organization, and business practices have evolved.

One of the easiest ways to understand the basics of asymmetrical competition is to examine a situation involving a well-established business versus a startup that offers similar goods and services. The well-established business has a fully developed business model, a solid client base, and a reputation among consumers. By contrast, the startup business may operate with a different business model, and has yet to establish a client base or reputation among consumers. The competition between the two companies would be considered unequal or asymmetrical since each company approaches the task of being profitable in a different manner.

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The advent of Internet commerce has helped to fuel the increase in asymmetrical competition in many different industries. Online retailers were able to emerge as strong competitors to long-time retailers who operated multiple brick and mortar retail outlets. At first, the business model employed by dissimilar competitors in the retail market was different. However, as buying goods and services over the Internet became more popular, traditional retailers found themselves in a position of not only having to compete with other retailers who also followed the pattern of having physical retail outlets, but also had to deal with start-ups who offered online shopping opportunities. The result is that these asymmetrical competitors not only thrived using a new business model, but were able to entice established giants in the industry to retool their existing business model to include a new type of sales outlet.

An example of the asymmetrical competitor can be found in just about every industry. The deregulation of telephone communications during the 1980’s opened the door for many start-ups to begin offering local and long distance telephone services using different technologies, price models and service delivery methods. Specialized telephone services, such as audio teleconferencing, also were offered by newer start-ups that challenged the pricing model established by major players in the industry and helped to make teleconferencing affordable for small and mid-sized businesses. Even the food service industry has examples of asymmetrical competition, as new restaurant chains look for new and creative ways to challenge the way things are done by well-established restaurants.

At its best, asymmetrical competition makes it possible for new companies with limited resources to develop their own following and help to set a new standard for a given industry. One of the realities of asymmetrical competition is that the approach helps to encourage creativity, as it often requires accomplishing much without a vast amount of resources on hand.

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