Topic 1.2.4 The Competitive Environment Flashcards
2nd one
Industry
An industry for a specific good or service. Businesses often analyse the market for bottled water or the market for games consoles.
The term ‘market’ can be used in 3 different ways. 1st one -
Place to trade products
A place where buyers and sellers meet to trade products. This can be a website like eBay or a stock market.
3rd one
Specific group of customers
We often talk about the market for 16 year olds or the market for retired people (retirees).
This is often used when talking about a company’s “target market”, which is the group of people that a company aims their product or service at.
Competition
Competition is defined as other companies who are selling a similar (or the same) product in the same market. Competition is all about meeting the customer’s needs better than competitors. This might be by providing a low price or a high quality product.
What can businesses compete on?
Location,
Businesses can also compete on…
Product range
Businesses can also compete on…
Price
Businesses can also compete on…
Quality
Quality
Competition can lead to better quality products or services if firms compete by creating the highest quality or best product (or service).
Companies like Apple compete by making the highest quality product that they can.
Price
Competition often forces businesses to be efficient.
Businesses may try to produce their product at the lowest cost possible.
Ryanair is an airline that tends to compete with competitors on price. It has a very short period of time between its flights so that it uses its planes as efficiently as possible.
