Competitive environment

Question 1

Competitive environment -

Answer 1

-where a business operates in a market where there are other businesses producing the same or similar goods and services

Question 2

Types of competitive environment (3)

Answer 2

Monopoly
Oligopoly
Competitive markets

Question 3

Little to no competition (4)

Answer 3

1. Only seller of a particular good or service
2. Unique, innovative product
3. One of a few large businesses which sells a particular good or service
4. Much better value for money than competitors

Question 4

Effects of weak competition (5)

Answer 4

1. Very profitable
2. No alternatives for customers
3. Can charge high prices
4. Profits might be invested into the business to make it more efficient
5. Quality, however, may suffer as they have no motivation to be better

Question 5

Benefits of competition (5)

Answer 5

1. Encourage firms to make their product better
2. Firms will focus of one area of market/strength
3. Research to improve the product and reduce cost
4. Improved customer service
5. Look at competitors to improve own product

Question 6

Types of competition (in which way producers can compete) (5)

Answer 6

Price
Quality
Location
Product range
Customer service

Question 7

How to add value? (5)

Answer 7

1. Quality
2. Design
3. USP
4. Convenience
5. Marketing