Why might a business WANT to set up in an area with many competitiors?

Depends on what business you are referring too…If it is takeaway or dine in shops, I can understand why, if businesses are booming in a suburb, wouldn’t you want a piece of the cake (profit). Another idea is, if the business is providing a particular, specific product or services, and if the company is a large corporation, they would want to set up business in a very hot market (suburb/s) knowing they can afford to lower their prices and have customers loyal to other businesses already set up, to shop at their place instead… This allows the new, big business to squash the little players as smaller; family owned businesses cannot afford to lower their prices to compete with the new shop.