Competitive environment

Question 1

What is a market?

Answer 1

A market exists where there are buyers and sellers. These buyers and sellers come together to exchange goods and services and to set prices for goods and services.

Question 2

There are numerous different types of markets including:

Answer 2

• Geographical - a specific place where buyers and sellers would meet.
• Online markets - buyers and sellers use technology to exchange information and to agree prices
• Local markets - purchasing from a nearby business

Question 3

What is competition?

Answer 3

Competition exists when more than one business is attempting to attract the same customers. Markets are normally competitive because most businesses that sell goods and services face rivals who are willing to sell similar goods and services.

Question 4

What is meant by uncertainty and risk?

Answer 4

Uncertainty occurs where there is a lack of information about a situation. This means the outcome or consequences are very difficult to predict.
Risk is the possibility of something going wrong.

Question 5

How can businesses minimise risk?

Answer 5

-Prepare business plans
-Invest in training
_To deal with insecure _IT systems and cybercrime
_To deal sensitively with dissatisfied customers
_To manage crisis such as flooding
-Using experts and consultants
-Selling in different markets - spreading the risk (diversification)