the competitive environment

Question 1

determinants of competitiveness

Answer 1

• number and size of businesses in the market
• the extent of barriers to entry
• the extent to which products can be differentiated
• the knowledge of buyers and sellers

Question 2

impact on businesses of a competitive environment

price

Answer 2

businesses have less control over price in a highly competitive market, prices are likely to be forced down, the lower the price, the higher the attraction of consumers

Question 3

impact on businesses of a competitive environment

profit

Answer 3

profit margins are likely to be squeezed as prices are forced down, but some businesses can operate more effiiciently and reduce their costs to be able to enjoy higher profit margins

Question 4

impact on businesses of a competitive environment

communication with customers

Answer 4

businesses need to be attentive to customer needs if they want to do well in a competitive environment

Question 5

impact on businesses of a competitive environment

innovation

Answer 5

it is important that a business is innovative in a competitive environment, as they can then gain a competitive edge

Question 6

impact on businesses of a competitive environment

product range

Answer 6

if a business extends its range of products, it will put pressure on competitors to also extend their range of products

Question 7

impact on businesses of a competitive environment

marketing

Answer 7

a business’ marketing strategies will put pressure on rivals to implement better marketing strategies

Question 8

global markets

Answer 8

largest markets, around the world

Question 9

national markets

Answer 9

markets confined to national borders (country)

Question 10

regional markets

Answer 10

limited to regions, e.g transport for London

Question 11

local markets

Answer 11

small markets, limited access, these are in villages or towns

Question 12

operating in large markets