2.5.3 The Competitive Environment Flashcards
Impact of a competitive environment
Price – In a highly competitive market, businesses have less control over the prices they charge.
Profit – if prices are being squeezed then business who manage their cost carefully will be more profitable.
Communication with customers – market research, social media, communicating expected delivery times and engaging with customers is becoming more and more important
Innovation – The development of a new product or USP will keep businesses competitive.
Product range – Developing a wide product portfolio will keep consumers. Failure to do so may mean losing consumers to rivals.
Marketing – The more competitive the market, the more important the marketing strategy, which is likely to need a high budget.
Effect of Small markets
Will need to determine if the market is large enough.
May be less competition
Fear of a stronger rival entering theMarket.
Few economies of scale
effect of Large markets
Competition can be severe.
Likely to be more challenging.
Will need to monitor and respond to rivals
Wide customer base
