Competitive Factor

Question 1

What is competitive factor?

Answer 1

An organisation’s competition refers to rival organisations that provide the same or a similar product and attempt to take their customers, attract new customers or keep their own customers.

Question 2

What are the positive impacts on the competitive factor?

Answer 2

• Competition opening up a physical store right next to a business can be good as it provides more choice for customers and brings passing trade to the area.
• Competition improves a market as it brings with it more choice, new ideas and keeps prices low, which can benefit all businesses in the market.

Question 3

What are the negative impacts on the competitive factor?

Answer 3

• The competition could lower prices, undercutting another business. Businesses will either have to lower prices too, reducing profits, or risk losing customers to the competition.
• The competition could launch new or improved products. Businesses will have to spend money researching and developing products to keep up with competition.