2.5.3 The competitive environment

What is the competitive environment?

The competitive environment concerns the degree to which a business is affected by rivals that operate in the same market

What might a small grocer focus on their unique selling points to adapt to supermarket competition?

• Independent grocers often have unique selling points that larger supermarkets may not be able to match, which can help them differentiate themselves

• They can focus on local produce, speciality items or a personalised shopping experience

What might a small grocer adjust their pricing strategy to adapt to supermarket competition?

• Independent grocers may not be able to compete on price with larger supermarket chains due to their economies of scale

• They may choose to adjust their pricing strategy to focus on higher-end products

What might a small grocer enhance customer service to adapt to supermarket competition?

• Independent grocers can differentiate themselves from larger supermarket chains by providing excellent customer service

• This can include offering personalised recommendations, remembering customers’ preferences and personally welcoming customers each time they visit

What might a small grocer expand their product range to adapt to supermarket competition?

• Independent grocers may choose to expand their product range To include items that customers may be unable to find in larger supermarkets

• This could include speciality items or local produce

What might a small grocer collaborate with other local businesses to adapt to supermarket competition?

• Independent grocers can work with other local businesses to create a sense of community and promote local shopping

What is market size?

Market size is the number of customers and seller in a particular market

What happens to businesses entering niche markets?

• Businesses entering niche markets may struggle to sell a high volume of goods due to limited demand, as the market size is small

• For these businesses, the specialised knowledge or skills required may well limit the competition, and the higher costs of production may well put off new businesses from launching

What happens to businesses entering large markets?

Businesses entering large markets may face more competition from established businesses, higher costs of promotion and challenges in deciding their pricing strategy