Competing or cooperating with an incumbent company is crucial for a start-up one. When the incumbent company poses tough competing strategies, one is likely to lose if it chooses to compete. However, if the entry company has enough resources, it can challenge the incumbent company to use more resources in marketing which will have a massive impact on its financial resources. I will choose to compete rather than cooperate with the whole market because entering the market means there is enough market potential that needs exploration by joining the market independently.
One advantage of competing with the incumbent company is obtaining equal market competition by leveraging the current market resources. The competition challenges the incumbent company to use more resources in marketing which will have a significant impact on its financial resources. Both companies can compete fairly by leveling their marketing strategies and resources.
Another benefit is generating additional market demand and development by the existing company through extensive and intensive marketing to outshine the entering competition. However, business is likely to lose if marketing strategies become stiff, leading to using more resources than predicted. Likewise, the incumbent company could merge with other competitors to pull down the new company and eliminate competition leading to failure. Therefore, a business must consider all possible options of cooperation or competition with existing companies before deciding on the best way to go.