Session 5 - competition, risk and uncertainty Flashcards
What is competition
The number and strength of other businesses selling products or services within your market sector
Why does competition occur
2+ businesses aim to supply a product to the same target market
What are direct competitors
Competitors who produce the same type of goods and compete through price, quality etc
What are indirect competitors
Competitors who offer those goods as substitutes, cutting down sales of other products
What method of decision making can competition affect
Type of ownership, product range, pricing policies, marketing methods
What is uncertainty
Unexpected events that can have a dramatic effect on market performance. Cannot be quantified
What are examples of uncertainty
Tsunami, inflation, War etc
What is risk
Something that can be planned for when probabilities of outcomes are known
What is an example of risk
Start up businesses 60% failure rate
What are some internal risk factors
Employees, technology used, operation, physical (computer theft/damage)
What are some external risk factors
Economic (pricing pressure), natural (earthquakes), political (law), competitors, emergent tech, environment changes
