1.2.4 The Competitive Environment

What is a competitive environment?

• An office with lots of colleagues

• A market with many businesses offering the same product

• A business with no rivals

• A workplace with strict rules

Which of the following is a strength of a competitor?

• Poor customer service

• Limited product range

• Low prices

• Remote location

What is a business most likely to do if a new competitor offers better quality?

• Increase prices

• Ignore the competitor

• Improve its own quality

• Close down

A business with a wide product range is likely to:

• Confuse customers

• Attract more market segments

• Increase waste

• Lower quality

Which is a weakness of a competitor?

• Strong brand loyalty

• Limited opening hours

• Good customer reviews

• Competitive pricing

High quality products often mean:

• Lower demand

• Higher prices

• Less choice

• Poor customer service

Which factor is not a basis for analysing competitors?

• Hair colour of staff

• Product range

• Price

• Customer service

A benefit of analysing competitors is:

• Ignoring industry trends

• Creating unrealistic goals

• Making better business decisions

• Reducing product quality

Which of the following is part of the competitive environment?

• Government tax policy

• Climate change

• Price wars between firms

• Internal recruitment

A business might respond to increased competition by:

• Raising prices

• Cutting customer service

• Offering discounts or deals

• Selling fewer products