2.6 Competitive environment

• Market structure influences the level of competition.

  True
• The competitive environment of a business is influenced by its structure
• What is the purpose of Porter's Five Forces framework?

  Analyze the competitive environment
• What are the five forces identified in Porter's framework?

  New entrants, suppliers, buyers, substitutes, rivalry
• The threat of new entrants can potentially lower prices and profits.


  True
• Cost leadership is most effective in perfect competition and oligopoly markets.


  True
• What is the primary goal of a differentiation strategy?

  Offer unique products
• What are technological factors in the PESTLE framework?

  Innovations affecting operations
• Market structure influences the level of competition in an industry.


  True
• Competitor analysis involves identifying the strengths and weaknesses of rival firms.
• What does the threat of new entrants in Porter's Five Forces refer to?

  Ease of new firms entering
• Understanding Porter's Five Forces helps businesses develop strategies to protect their market position.


  True
• What does the differentiation strategy focus on?

  Unique products
• The focus strategy can involve either a cost focus or a differentiation focus.


  True
• What is an example of a technological innovation that improves efficiency?

  Automation
• How does automation impact competition?

  Improves efficiency
• What is an example of a technological innovation enhancing business capabilities?

  Robotics
• In a monopoly, a single firm has exclusive control, allowing high price setting
• Order the steps of the PESTLE framework:

  1️⃣ Political

  2️⃣ Economic

  3️⃣ Social

  4️⃣ Technological

  5️⃣ Environmental

  6️⃣ Legal
• The types of markets include perfect competition, oligopoly, and monopoly
• What is the purpose of competitor analysis?

  To understand rival firms
• Understanding the market structure is crucial for developing effective competitive strategies.


  True
• The threat of new entrants increases competition in the market.


  True
• Match the force from Porter's Five Forces with its description:

  Bargaining Power of Suppliers ↔️ Ability to increase prices

  Threat of Substitute Products ↔️ Alternative products meeting customer needs

  Rivalry Among Existing Competitors ↔️ Intensity of competition between firms
• The focus competitive strategy targets a specific market segment or niche
• Cost leadership involves offering the lowest prices
• Order the categories of the PESTLE framework:

  1️⃣ Political

  2️⃣ Economic

  3️⃣ Social

  4️⃣ Technological

  5️⃣ Environmental

  6️⃣ Legal
• What is the competitive environment in business?

  Competition for customers
• Order the 5 forces in Porter's Five Forces framework:

  1️⃣ Threat of New Entrants

  2️⃣ Bargaining Power of Suppliers

  3️⃣ Bargaining Power of Buyers

  4️⃣ Threat of Substitute Products

  5️⃣ Rivalry Among Existing Competitors
• What is the rivalry among existing competitors in Porter's Five Forces?

  Intensity of competition
• Cost leadership is effective in perfect competition and oligopoly markets.


  True
• What does the focus strategy target?

  Specific market segment
• Increased health consciousness is an example of a social
• Consumer protection laws increase consumer trust
• Artificial intelligence enhances decision-making and personalization
• Match the market structure with its characteristics:

  Perfect Competition ↔️ Many firms, high competition

  Oligopoly ↔️ Few firms, moderate competition

  Monopoly ↔️ One firm, very low competition
• The differentiation strategy builds brand loyalty by offering superior products.


  True
• What is the competitive environment in business?

  The business competition landscape
• Match the market structure with its characteristics:

  Perfect Competition ↔️ Many firms, high competition

  Oligopoly ↔️ Few firms, moderate competition

  Monopoly ↔️ One firm, very low competition
• Order the steps involved in understanding market structure and its impact on competition:

  1️⃣ Identify the type of market structure

  2️⃣ Assess the number of firms

  3️⃣ Analyze the level of competition

  4️⃣ Evaluate the degree of price control