3.2.4 Reasons for staying small

Question 1

What are the 4 main reasons for staying small

Answer 1

1)-Product differentiation & USPs

2)-flexibility in meeting customer need

3)-High standard in customer service

4)-Exploit opportunities from e-commerce

Question 2

Product differentiation

Answer 2

The process of distinguishing your product from that of competitors.It’s what you do to make it stand out compared to the rest.

Question 3

USP

Answer 3

Unique selling point-A feature or characteristic of your product/service that makes it stand out amongst other market participants

Question 4

People prefer products that are different and that stand out from the crowd. T/F

Answer 4

True

Question 5

What is added by differentiating your product or developing a USP

Answer 5

Added value

Question 6

Added value

Answer 6

Features/characteristics that make your products more appealing giving you a reason to charge extra

Question 7

Small businesses are flexible in responding to customers needs T/F

Answer 7

True

Question 8

Why are small firms flexible

2 points

Answer 8

• decisions can be made quickly
• operations can be adapted to the changing needs of customers

Question 9

Why is it harder for larger firms to adapt to ‘customers wants and needs’ compared to smaller firms

Answer 9

Because they are hampered by a complex organisational structure where approval for a business decision can take days