Competitive Factor Flashcards

1
Q

What is competitive factor?

A

An organisation’s competition refers to rival organisations that provide the same or a similar product and attempt to take their customers, attract new customers or keep their own customers.

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2
Q

What are the positive impacts on the competitive factor?

A
  • Competition opening up a physical store right next to a business can be good as it provides more choice for customers and brings passing trade to the area.
  • Competition improves a market as it brings with it more choice, new ideas and keeps prices low, which can benefit all businesses in the market.
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3
Q

What are the negative impacts on the competitive factor?

A
  • The competition could lower prices, undercutting another business. Businesses will either have to lower prices too, reducing profits, or risk losing customers to the competition.
  • The competition could launch new or improved products. Businesses will have to spend money researching and developing products to keep up with competition.
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