Final answer:
Niche competitors are businesses that focus on a specific segment of the market with specialized products or services. They adhere to the competitive exclusion principle, creating a unique market space to avoid direct competition. Analogous to ecological niches, business niches are defined by the unique roles and interactions companies have within the marketplace.
Step-by-step explanation:
Niche competitors are companies or brands that target a specific customer base or a particular segment of the market, often with specialized products or services. These entities focus on a distinct audience by fulfilling specific needs or preferences that are not thoroughly addressed by mainstream providers. For example, in a market with many monopolistic competitors, such as the variety of clothing stores in a large shopping mall, each store may have its unique brand image, style, or type of clothing that constitutes its niche.
According to the competitive exclusion principle, in ecosystems, no two species can occupy exactly the same niche, as they would compete until one outperforms the other. Similarly, in the business world, when one company finds success with a particular niche, others may attempt to enter the market with variations, like a gas station offering additional services like coffee or a carwash to attract customers from an established rival.
An ecological niche includes an organism's role in the flow of energy through the ecosystem, its interactions with other organisms, and its role in recycling nutrients. Correspondingly, a business niche includes the unique way a company operates within the market, its customer interactions, and how it distinguishes itself from the competition.