While competition can drive growth, it also poses several risks:
Price Wars: Intense competition can lead to price wars, which can erode profit margins and make it difficult to sustain the business. Market Saturation: In highly competitive markets, the risk of saturation is high. This means there are too many businesses offering similar products or services, making it harder to attract customers. High Customer Acquisition Costs: Acquiring new customers can become increasingly expensive in a crowded market. This can strain financial resources, especially for startups. Pressure to Innovate: The constant pressure to innovate can be overwhelming and can lead to burnout. It requires significant investment in research and development.