COMPETITIVE ENVIRONMENT

Question 1

the level of competition a business faces depends on:

Answer 1

• size of the market
• number of competitor
• barriers to entry
• type of product

Question 2

competition within a market can impact a business in a. number of ways:

Answer 2

• customers are less loyal e.g. shop around
• price sensitivity e.g. go to the cheapest one, force businesses to lower prices
• innovation

Question 3

define competitiveness

Answer 3

competitiveness is the ability of a business to deliver better value to customers than other businesses in the market
- if sustained = competitive advantage

Question 4

a competitive advantage is therefore

Answer 4

• the ability to add more value
• advantage over competitors by offering better value, quality service

Question 5

to be more competitive a business will look at its whole operation for example:

Answer 5

• organisational structure
• a form of business
• methods of production
• capacity
• workforce
• marketing mix

Question 6

large market

Answer 6

large market = attract more competition especially if the market is growing

Question 7

how do big and small businesses survive in competitive markets?

Answer 7

big = charge the lowest prices
small = add value, differentiate, non-price factors, as it cant compete with larger businesses on price