Competitive Evnoirmemt

Question 2

Market and competition

Answer 2

Market - exists where there are buyers and sellers allowing them to exchange info.
Competition- when business try to sell same product to attract same customers, compete for customers.

Question 3

Different types of competitions in the market

Answer 3

,Monopoly- the only business providing the product - little or no competition, high prices

Few businesses - may be large businesses - supermarkets, competition can be intense but not always, prices may be low. Compete using - price, advertising, new products

Many businesses

Question 4

Uncertainty

Answer 4

This exists when a business do not have suffeciemt information about a specific circumstance.

Question 5

Risk

Answer 5

Possibility of something going wrong but it can be measured.

Question 6

Wh all businesses face uncertainty

Answer 6

Most situations - lack on information. Economy - many unaware of future economic events and the effects they have on market.
Competitors and uncertainty - competitors action uneasy to predict. Eg price reductions, launch of something

Question 7

Risks businesses face

Answer 7

Change in the law,
loss of key supplier
, disasters and accidents - preventing production,
new products developed,
bad publicity and
not attracting enough customers

Question 8

Ways to minimize risk

Answer 8

Planning ahead - contingency plans to deal with risks such as flood or sudden rise in price of raw materials.
Sell different products to a range of markets. Less likely suffer major fall in sales for all products at same time.
Prepare employees for change through timing - training help employees overcome risk of bad publicity from errors.

Question 9

Entrepreneur reducing the risk they face by:

Answer 9

Seeking advice - experts can help identify risk and develop ways to OC
Plan thoroughly- identify risks
Employ the right people - skills they need to build successful business.