Define the competitive environment
the degree to which a business is affected by rivals that operate in the same market
What does a competitive environment pressure a business to do
lower prices
Invest more in innovation
Differentiate their products
What did Porter say were the 5 factors that affect competitiveness in a market?
-Threat of substitute products
-Threat of new entrants
-Bargaining power of suppliers
-Bargaining power of buyers
-Intensity of rivalry within the industry
Give 3 other factors that may affect competitiveness in a market
-Pace of innovation and development
-Seasonality of the product
-Growth rate of the market
How may increased competition benefit a business?
Business may;
Improve efficiency
increase innovation
Expand their product range
How may increased competition be a drawback to a business?
Business may;
Increase promotion costs
prices of products may fall
What impact does the size of a market have on a business?
-businesses entering niche markets may have less comp as the skills required may limit people from entering the market
-businesses entering a large market may face more competition from established firms
What’s direct competition
when two or more companies offer similar products or services and target the same customer base
What’s indirect competition?
occurs when businesses offer different products or services, but they both compete for the same customer base or share similar needs
What’s market revenue
Total amount of revenue in the market
What’s market volume
Total amount of products sold by all companies in the market
What is a monopoly
One business controls the entire market
Eg- Pepsi
What is an oligopoly
Multiple large firms control the market
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2.1.1 Internal finance6
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2.1.2 External finance9
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2.1.3 Liability9
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2.1.4 Planning11
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2.2 formulas9
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2.2.1 Sales forecasting19
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2.2.2 Sales, revenue and cost8
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2.2.3 Break even15
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2.2.4 Budgets14
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2.3.1 Profit27
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2.3.2 Liquidity25
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2.3.3 Business Failure10
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2.4.1 Production, productivity and efficiency28
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2.4.2 Capacity utilisation18
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2.4.3 Stock control14
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2.4.4 Quality management16
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2.5.1 Economic influences40
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2.5.2 Legislation19
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2.5.3 Competitive environment13
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2.1+ 2.2 KEY TERMS26
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2.3 KEY TERMS12
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2.4 KEY TERMS34
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2.5 KEY TERMS30
