1.2.4 Competitive environment Flashcards
What does completive environment mean
-it mean that a business is sourded with competition
Name all the Things a business wants to do to become completive
- Lower Prices
- More coinvent location
- Improve the quality and the customer services
- Target niche Market
why does lower prices help a business become more competitive
-Prevent customers going elsewhere
- it make you more competitive
A Example of competition in a completive environment
-small firms selling the same product
why does a convenient location help a business become more competitive
-Provide more outlets and websites
Explain The Advantages Of A Business Having Competition (5 Marker)
Competition leads to lower prices (P) This is because lower prices will encourage customers to buy from them.(S) This leads to businesses having to have low fixed and variable costs (S) Therefore businesses may choose to purchase in bulk to benefit from economies of scale (S)
Explain How Increased Competition Will Affect a Small Business (3 Marker)
Increased competition will affect location decisions for a small business (P) This is because with lots of competition the business will find it difficult to attract customers (S) Therefore they may choose to locate where other businesses aren’t in order to attract the local customer base (S)
Explain How Competition Can Become a Disadvantage For Small Business (6 Marker)
Competition leads to businesses having to lower their prices (P) This is because they have to attract customers away from its competition (S) This leads to businesses having to possibly find a cheaper supplier (S) Therefore businesses may make less profit as each product is sold for less (S)
