competitive environment

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GCSE Business Studies

Edexcel

Spotting a Business Opportunity

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13 Terms

1
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direct competition

when the business is targeting customers with the exact same product as a competitor

<p>when the business is targeting customers with the exact same product as a competitor</p>
2
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indirect competition

when a firm sells different products but compete for the customers disposable income

<p>when a firm sells different products but compete for the customers disposable income</p>
3
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absence of competitioj

reduces incentives for businesses to innovate, be efficient or offer lower prices

<p>reduces incentives for businesses to innovate, be efficient or offer lower prices</p>
4
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price strength

gain competitive advantages

gain economies of scale by producing at lower cost

<p>gain competitive advantages</p><p>gain economies of scale by producing at lower cost</p>
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price weakness

may struggle with profitability if its too low

struggle with differentiation from competitors

<p>may struggle with profitability if its too low</p><p>struggle with differentiation from competitors</p>
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quality advantages

establishes a strong brand

greater profitability from higher prices

<p>establishes a strong brand</p><p>greater profitability from higher prices</p>
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quality disadvantages

can struggle with lower priced rivals if customers don’t focus on this

<p>can struggle with lower priced rivals if customers don’t focus on this</p>
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location advantages

gain competitive advantages if they have an accessible location

<p>gain competitive advantages if they have an accessible location</p>
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location disadvantages

may struggle to compete with businesses nearby

<p>may struggle to compete with businesses nearby</p>
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product range advantages

attracts a broader customer base

<p>attracts a broader customer base</p>
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product range disadvantages

hard to manage with complexity of their business

<p>hard to manage with complexity of their business</p>
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customer service advantages

establish a loyal customer base

word of mouth advertising

<p>establish a loyal customer base</p><p>word of mouth advertising</p>
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competition impacts

prices, product development, marketing decisions, operational decisions

<p>prices, product development, marketing decisions, operational decisions</p>