4.2.5 Global Competitiveness

Question 1

What are the 2 ways a business can achieve global competitiveness?

Answer 1

Cost competitiveness
Differentiation

Question 2

What is cost competitiveness?

Answer 2

When a business has relatively low costs compared to competitors, which allows them to charge lower prices

Question 3

How do lower prices increase competitiveness?

Answer 3

It attracts customers and increases the firm’s market share. This can force competitors with higher prices out of the market

Question 4

How can a business reduce costs?

Answer 4

By buying low quality raw materials

Question 5

What is differentiation?

Answer 5

When a product is seen to have unique features that competitors don’t have.

Question 6

How can differentiation increase revenue?

Answer 6

As businesses can charge higher prices for differentiated products

Question 7

What other factors can affect global competitiveness?

Answer 7

Skill shortages

Question 8

How do skill shortages affect production?

Answer 8

Some industries don’t have enough skilled workers to make their products. This reduces cost competitiveness due to high costs of production.

Question 9

How can businesses resolve skill shortages?

Answer 9

- By offering incentives to attract skilled workers
- Using outsourcing and offshoring