1.3.6 The Competition Flashcards
What is a market map
Shows all the positions a product can take based on 2 dimensions
E.g. high vs low price
What does a market map show
Which existing products meets which customer needs ( gaps can then be identified & firms can enter the market to fill the gaps)
How does a firm have competitive advantage
When its products are deemed to be better than its competitors by consumers
How does a firm gain competitive advantage
Using price, cost or through a niche market
What is product differentiation
The act of distinguishing a product from another
How could goods & services be differentiated
Using a unique selling point
E.g. having a better design/ being in a more convenient location
What is the added value of a product
The additional value a firm creates during the production process
Price of the finished product - cost of inputs used to make it
How can value be added to a product
Using a brand, quality, good service, unique features & convenience for the consumer
How is a high added value of a good beneficial
The more profitable the firm becomes
What is a stable market
One where trade can be conducted in large volumes w/o causing the price to change significantly
What is a dynamic market
One which changes constantly & rapidly
E.g. tech
