4.2.4
The Competitive Environment
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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. Businesses can compete on:
Product range
- Product range is the different goods or services that one firm offers to customers.
The Impact of High Competition
Competition normally has a negative effect on a business’ profits. This is because in a competitive market, the business has less control over prices. Competition forces businesses to be efficient and to constantly try to improve their product. Firms usually compete on:
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.
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.
1Business Activity & Influences on Business
1.1Business Objectives
1.2Types of Organisations
1.2.1Sole Traders & Partnerships1.2.2Limited Companies1.2.3Limited Liability1.2.4Unlimited vs Limited Liability1.2.5Not For Profit & Franchises1.2.6Multinational Companies1.2.7End of Topic Test - Business Ownership1.2.8Application Questions - Business Ownership1.2.9Diagnostic Misconceptions - Company vs Business1.2.10Diagnostic Misconceptions - Owners vs Shareholders
1.3Classification of Businesses
1.4Decisions on Location
1.5Business & the International Economy
1.6Government Objectives & Policy
1.7External Factors
1.8What Makes a Business Successful?
2People in Business
2.1Internal & External Communication
2.2Recruitment & Selection Process
2.3Training
2.4Motivation & Rewards
3Business Finance
3.1Sources of Finance
3.2Cash Flow Forecasting
3.3Cost & Break-Even Analysis
3.3.1Costs, Revenue & Profit3.3.2Profit, Average Unit Cost & Interest3.3.3Costs - Calculations3.3.4Revenue - Calculations3.3.5Break-Even Analysis3.3.6Profit & Losses - Calculations3.3.7End of Topic Test - Finance3.3.8Grade 9 - Finance3.3.9Diagnostic Misconceptions - Fixed Costs3.3.10Diagnostic Misconceptions - Break-even
3.4Financial Documents
4Marketing
4.1Market Research
4.2The Market
4.3The Marketing Mix
4.3.1Price4.3.2Price Penetration4.3.3Other Forms of Pricing4.3.4Product Design4.3.5The Product Life Cycle4.3.6Extending Existing Products4.3.7New Products4.3.8Benefits and Risks of New Products4.3.9Promotion4.3.10Public Relations and Sales Promotion4.3.11Sponsorship & Social Media4.3.12Product Placements4.3.13Promotional Mix4.3.14Place4.3.15Place 24.3.16Place 34.3.17M-Commerce4.3.18Benefits & Drawbacks of M-Commerce4.3.19End of Topic Test - Marketing Mix4.3.20Grade 9 - Marketing Mix4.3.21Diagnostic Misconceptions - Decreasing Price4.3.22Diagnostic Misconceptions - Advertise vs Promote4.3.23Diagnostic Misconceptions - Social Media
5Business Operations
5.1Economies & Diseconomies of Scale
5.2Production
5.3Factors of Production
Jump to other topics
1Business Activity & Influences on Business
1.1Business Objectives
1.2Types of Organisations
1.2.1Sole Traders & Partnerships1.2.2Limited Companies1.2.3Limited Liability1.2.4Unlimited vs Limited Liability1.2.5Not For Profit & Franchises1.2.6Multinational Companies1.2.7End of Topic Test - Business Ownership1.2.8Application Questions - Business Ownership1.2.9Diagnostic Misconceptions - Company vs Business1.2.10Diagnostic Misconceptions - Owners vs Shareholders
1.3Classification of Businesses
1.4Decisions on Location
1.5Business & the International Economy
1.6Government Objectives & Policy
1.7External Factors
1.8What Makes a Business Successful?
2People in Business
2.1Internal & External Communication
2.2Recruitment & Selection Process
2.3Training
2.4Motivation & Rewards
3Business Finance
3.1Sources of Finance
3.2Cash Flow Forecasting
3.3Cost & Break-Even Analysis
3.3.1Costs, Revenue & Profit3.3.2Profit, Average Unit Cost & Interest3.3.3Costs - Calculations3.3.4Revenue - Calculations3.3.5Break-Even Analysis3.3.6Profit & Losses - Calculations3.3.7End of Topic Test - Finance3.3.8Grade 9 - Finance3.3.9Diagnostic Misconceptions - Fixed Costs3.3.10Diagnostic Misconceptions - Break-even
3.4Financial Documents
4Marketing
4.1Market Research
4.2The Market
4.3The Marketing Mix
4.3.1Price4.3.2Price Penetration4.3.3Other Forms of Pricing4.3.4Product Design4.3.5The Product Life Cycle4.3.6Extending Existing Products4.3.7New Products4.3.8Benefits and Risks of New Products4.3.9Promotion4.3.10Public Relations and Sales Promotion4.3.11Sponsorship & Social Media4.3.12Product Placements4.3.13Promotional Mix4.3.14Place4.3.15Place 24.3.16Place 34.3.17M-Commerce4.3.18Benefits & Drawbacks of M-Commerce4.3.19End of Topic Test - Marketing Mix4.3.20Grade 9 - Marketing Mix4.3.21Diagnostic Misconceptions - Decreasing Price4.3.22Diagnostic Misconceptions - Advertise vs Promote4.3.23Diagnostic Misconceptions - Social Media
5Business Operations
5.1Economies & Diseconomies of Scale
5.2Production
5.3Factors of Production
Practice questions on The Competitive Environment
Can you answer these? Test yourself with free interactive practice on Seneca — used by over 10 million students.
- 1
- 2
- 3
- 4Does Apple compete more on price or quality?Multiple choice
- 5Does Aldi compete more on quality or price?Multiple choice
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