2.5.3 The competitive environment Flashcards
What does the competitive environment refer to?
The degree to which a business is affected by rivals that operate in the same market
The competitive environment influences a business’s response time and strategic decisions.
How does competition affect businesses operating in a market?
It determines how quickly the business responds and impacts marketing and operational strategy
Businesses must adapt their strategies based on the level of competition they face.
What is market size?
The number of customers and sellers in a particular market
Understanding market size is crucial for businesses to assess demand and competition.
What challenges do businesses face when entering niche markets?
Struggling to support a high volume of goods due to limited demand as the market size is small
Niche markets often have specialized customer bases, leading to lower overall demand.
What are the potential issues for businesses entering large markets?
More competition from established businesses, higher costs of promotion, and challenges in deciding their pricing strategy
Entering large markets requires careful planning and strategy due to increased competition.
