2.5.3- The Competitive Environment

Question 1

Competitive Environment

Answer 1

competition from other businesses will impact the decision making in terms of:

nature of ownership 
nature of product or service sold 
product range offered 
pricing policies 
marketing methods

Question 2

Nature of ownership

Answer 2

if the market is competitive, business may decide to become an ltd or plc to sell shares in order to raise finance to introduce new products

Question 3

Nature of product or service

Answer 3

in a competitive market a business will have to differentiate the product sold or create a USP

Question 4

Product Range offered

Answer 4

to attract new customers away from the competition firms will need to carefully consider products on offer

Question 5

Pricing policies

Answer 5

price is often the differentiating factor in very competitive markets, meaning that the suppliers’ margins could be squeezed

Question 6

Marketing methods

Answer 6

in a competitive Market business will have to be more innovative with their marketing