The competitive environment

• Markets exist where there are buyers and sellers
• Competition exists when there is more than 1 business attempting to attract the same customers
• A monopoly is when a business does not face competition in a given market (has over 25% market share in a given market)
• market share is the percentage of sales in a particular market recorded by a business.
• An uncertainty occurs when there is a lack of information about a situatiion
• Risk is the possibility of something going wrong
• Internal risk

  • Fire
  • Bad publicity
  • Loss of 'best' employees

  External risk

  • Natural disasters
  • New competitors
  • Laws
• Diversification occurs when a business starts selling products in new markets.
• A recession occurs when the value of an economy's output of goods and services falls for 6 months or more.