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.
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.
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.