The Competitive Environment Flashcards
All 8 cards in this deck
Which five factors are used to judge the strengths and weaknesses of competitors?
Price, quality, location, product range and customer service.
How can a competitor's lower prices affect a small business's decisions?
The business may have to cut its own price or add value and differentiate its product to keep customers.
Why is high quality a strength for a competitor?
It attracts customers and allows the competitor to charge a higher price, so customers may choose them instead.
Why can location be a strength for a competitor?
A site with high footfall or close to its customers attracts passing trade that rivals further away lose.
What does 'product range' mean when comparing competitors?
The variety of different products a business sells — a wider range offers customers more choice.
Why is good customer service a competitive strength?
It builds a positive brand image and customer loyalty, leading to repeat purchases and recommendations.
Give two decisions a small business might change because of strong competition.
Its prices and the quality or range of its products (also its promotion, customer service or location).
True or false? Competition only has negative effects on a small business.
False. Competition can push a business to innovate and bring new ideas to market ahead of rivals, giving it a competitive advantage.