Increasing Competition Is Intensifying Risk for Organizations

The Growing Risk of Falling Behind Competitors

A volatile mix of technological, geopolitical and workforce-related forces is intensifying business competition. This has squeezed margins and complicated pricing strategies, making it even harder for companies to invest in the kind of disruptive innovation that will help them outpace the competition. These hurdles make increasing competition the fifth biggest risk in our 2025 Global Risk Management Survey.

Factors Driving Increased Competition

Managing the risks from increasing competition is becoming more complex due to multiple high-impact forces:

Digital and Technological Disruption
The breakneck pace of technological innovation — especially within generative artificial intelligence (AI), automation, digitalization and cloud platforms — is upending traditional business models and changing the way competition is defined. Businesses that fail to take a disruptive approach to digital transformation risk obsolescence as their competitors deploy new AI-powered tools to enhance efficiency, personalize customer experiences and reduce costs.

The War for Top Talent
The competition for talent with specialized skills in AI, data science and other emerging fields is intensifying rapidly. Organizations that fail to attract, develop and retain top talent face a struggle to grow and innovate disruptively.

Geopolitical Tensions
The increasing global trend of companies onshoring and reshoring their supply chains can give domestic players clear competitive advantages. However, it also carries the potential to stress already complex supply chains and energy infrastructure. Research raises the concern that this trend could fragment global economics and affect growth, innovation and competitiveness by limiting access to essential specialized talent, resources and marketplaces.¹

How Businesses can Mitigate the Impact of Increasing Competition

Be the Disruptor — not the Disrupted
Organizations that invest in emerging technologies and embrace a forward-thinking, flexible business model are significantly better positioned to retain market share as new players crowd the field. They are also equipped to predict future developments, unlock new revenue streams, enhance operational efficiency and influence purchasing behaviors through analytics.

Prioritize Human Capital and Innovation
Talent shortages and shifting workforce expectations remain persistent threats to competitiveness. Companies therefore need to adopt a skills-based approach to hiring and prioritize attracting, developing and retaining top talent.

Strengthen Cyber Security and Data Resilience
As digital competition intensifies, so do cyber threats. Organizations must invest in robust cyber defenses, regular risk assessments and employee training to prevent costly breaches that can erode customer trust and damage brand reputation.

Foster Customer Loyalty and Brand Differentiation
Now that customers have more choice, cultivating and retaining loyalty depends on organizations’ capacity to provide personalized experiences, consistent quality and transparent values.

Build Agility into Business Models
Rigid business models are liabilities. Business leaders need to embrace agile operating models and scenario planning that empower them to adapt rapidly to shifts in customer preferences, regulatory changes or technological advances. Being able to influence the buying behaviors of your future customer using advanced predictive behavioral analytics is mission critical.

Monitor and Respond to Regulatory and Geopolitical Shifts
Companies must ensure they have the resources they need to stay up-to-date with evolving policies and regulations, innovate at scale and at pace and build compliance and flexibility into their strategic planning.

Why it Matters

Increasing competition is a formidable risk when so many aspects of the business landscape are constantly changing. But by embracing disruptive digital innovation, investing in talent, strengthening cyber security, building agility, staying ahead of regulatory changes and deepening customer relationships, businesses can not only mitigate these risks but turn them into opportunities.

¹ Spencer Feingold, “Economic fragmentation is rising as global tensions intensify, experts say,” World Economic Forum

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