3.2.6 - The competitive environment

• What is a market?

  A place where buyers and sellers exchange goods
• What defines a competitive environment?

  A market with multiple businesses offering similar products
• How do businesses attract and retain customers in a competitive market?

  By satisfying customer wants and needs
• What is price competition?

  Competing by lowering prices to attract customers
• How can developing new products help a business?

  It can attract customers from competitors
• Why do companies invest in advertising?

  To attract consumers who switch brands regularly
• What happens in a competitive market regarding pricing strategies?

  Prices may decrease, leading to price wars
• What can businesses do to differentiate themselves from competitors?

  Improve product quality or customer service
• What is a situation where a business faces little to no competition?

  When they are the only seller of a product
• What are the benefits of competition for consumers?

  Lower prices and better products and services
• How does competition encourage businesses to improve?

  By focusing on market strengths and product quality
• What is risk in a business context?

  The possibility of negative outcomes for businesses
• What are external risks that businesses face?

  New competitors and natural disasters
• How can businesses minimize risks?

  By creating a comprehensive business plan
• What is the PESTLE analysis used for?

  • Assessing the external environment
  • Political factors
  • Economic factors
  • Social factors
  • Technological factors
  • Legal factors
  • Environmental factors
• What is a monopoly?

  A market dominated by a single business
• What is an oligopoly?

  A market dominated by a few businesses
• What is a duopoly?

  A market dominated by two businesses
• What can happen if competition is weak?

  Businesses can charge higher prices and make profits
• What are the potential downsides of weak competition?

  Quality may suffer due to lack of motivation
• What is the impact of customer service in a competitive market?

  It helps retain existing customers and build reputation
• What is the role of research in a competitive market?

  To improve products and reduce costs
• How does competition influence product development?

  It encourages businesses to innovate and improve
• What are the consequences of economic uncertainty for businesses?

  It can lead to lower sales and reduced profits
• What is the significance of understanding market competition?

  It helps businesses strategize effectively
• What is the importance of employee training in minimizing risks?

  It enhances skills and reduces internal risks
• How can businesses adapt to social changes?

  By adjusting products to meet changing tastes
• What is the impact of technological developments on businesses?

  They can create new opportunities and risks
• What is the role of legal factors in PESTLE analysis?

  To assess compliance with laws and regulations
• How does environmental awareness affect businesses?

  It influences consumer preferences and regulations
• What is the significance of understanding competition types like monopoly and oligopoly?

  It helps businesses strategize in their market
• What is the definition of a competitive environment?

  A market with multiple businesses offering similar products
• What is the impact of competition on product quality?

  It encourages businesses to maintain high standards
• How does competition affect pricing strategies?

  It forces businesses to be competitive with prices
• What is the role of customer service in a competitive market?

  To enhance customer satisfaction and loyalty
• How can businesses leverage advertising in a competitive market?

  To differentiate their products from competitors
• What are the potential benefits of a monopoly for a business?

  Higher profits due to lack of competition
• What is the significance of market research for businesses?

  It helps identify consumer needs and preferences
• What is the definition of an oligopoly?

  A market dominated by a few businesses
• How does competition influence innovation?

  It drives businesses to develop new products