"Competition" is the mutual rivalry or struggle between firms, such as in the struggle for market share, sales, profits, market power, reputation, or purchasing power.

The more competition there is, the more companies are forced to operate efficiently. Competition is thus good for cost efficiency and encourages innovation. Economists have identified different types of competition, with the most ultimate form being "perfect competition. This is a theoretical model of perfect competition that rarely occurs in practice.

Competition plays a crucial role in fostering healthy market forces and ensures that companies continually improve and innovate.