U1 AOS3/KK8: Competitor behaviour

Question 1

Competitive behaviour

Answer 1

how direct rivals of a business portage in the business environment. are factors that allow a company to produce goods or services for better or more cheaper then its rivals

Question 2

Porters Generic Stratgergies

Answer 2

two possible ways for a business to gain a competitive advantage eg. differentiation and low cost strategy

Question 3

1. Low Cost Strategy
   (Porters Generic Strategy)

Answer 3

When a company attempts to offer goods or services that are comparable to their competitors, but at a lower cost.

Aim of strategy = Have the lowest costs possible, in order to either:

• Increase profits by reducing costs, while charging industry-average prices.
• Increase market share by charging lower prices, while still making a reasonable profit on each sale because you’ve reduced costs.

Question 4

2. Differentiation strategy
   (Porters Generic Strategy)

Answer 4

A strategy in which a business seeks to distinguish itself from competitors through the products or services that it offers.

Achieved by:
* Adding value to new or existing products that aren’t being offered by competitors (sometimes called a USP or unique selling proposition)

Question 5

SWOT define/purpose

Answer 5

SWOT analysis (strengths, weaknesses, opportunities, and threats) is a business planning tool used to evaluate acompany’s competitive positionand to develop strategic planning.

Question 6

SWOT (S)

Answer 6

Strengths : Factors that are positive relative to competitors

Question 7

SWOT (W)

Answer 7

Weaknesses : Factors which are negative relative to competitors

Question 8

SWOT (O)

Answer 8

Opportunities : factors in the external environment that can be beneficial to the organisation

Question 9

SWOT (T)

Answer 9

Threats : factors in environment that can be detrimental to organisations

Question 10

BENEFITS OF SWOT

Answer 10

• Highlights the effectiveness of the businesses operation and the internal factors which influence its success.
• Shows the current and potential future position of a business.
• Highlights a businesses strengths and weaknesses against its competitors.
• Used to help the company meet consumer needs and keep up with the competition.

Question 11

LIMITATIONS OF SWOT

Answer 11

• Strengths and weaknesses are often a matter of perception rather than fact.
• May be advisable to employ an outside company to carry out a regular audit of the business.
• Open to interpretation (no two opinions are the same).
• Information is never perfect and the future always changes.

Question 12

Competitive Advantage

Answer 12

Factors that allow a company to produce goods or services better than or more cheaply than its rivals.

Question 13

How a business can generate a competitive advantage

Answer 13

PRICE = should be competitive and fair, offering good value for money
LOCATION = conveniently located
QUALITY = must be viewed as good quality by target
SELECTION = good selection/quality of products
SPEED = how quickly are the products available
SERVICE = pre-sale/transactional and after sales care