Chapter 13- how do firms compete?

Question 1

market positioning

Answer 1

refers to the way a product is seen in comparison with rival products. Market research helps to position products so that businesses can match customer preferences or appeal to different market segments

Question 2

repositioning

Answer 2

means targeting a different market segment, one with more potential sales revenue and profit

Question 3

sources of a competitive advantage (9)

Answer 3

lower price
higher quality
extra features
more convenient
successful advertising and branding
innovative technology
uniqueness
reliability 
customer service

Question 4

competitive advantage

Answer 4

means having an edge over rival products

Question 5

product differentiation

Answer 5

entails unique features which distinguish a product from its rivals. This may be based on special characteristics or a distinguish image which has been developed.

Question 6

adding value

Answer 6

occurs when factors of production are used to make material inputs more valuable to potential customers. It is the difference between the price paid and the total cost of the other inputs needed to create the product

Question 7

competitive pricing

Answer 7

takes account of prices changes for similar products competing in the same market. Prices will usually be the same or little below that of the closest rival.

Question 8

Capacity utilization

Answer 8

is a measure of the extent to which the productive capacity of a business is being used.

actual output/max possible output x100

Question 9

batch production

Answer 9

technique used in which the object is created stage by stage over a series of work stations

Question 10

flow production

Answer 10

involves the use of production lines

Question 11

cell production

Answer 11

has flow production split into a number of self contained unit. Each cell is responsible for a significant part.