competition and market size

• • The competitive environment concerns the degree to which a business is affected by rivals that operate in the same market
  • The threat competition presents to businesses operating in a market will determine how quickly the business responds
  • The greater the threat, the quicker the response required - and vice versa
• Ways in which a small firm can adjust for large firms entering the market:

  • Focus on their unique selling points
  • Adjust their pricing strategy
  • Enhance customer service
  • Expand product range
  • Collaborate with other local businesses
• • Market size is essentially the number of customers and sellers in a particular market
  • Businesses entering niche markets may struggle to support a high volume of goods due to limited demand as the market size is small
  • Businesses entering large markets may face more competition from established businesses, higher costs of promotion, and challenges in deciding their pricing strategy