Figuring out competitors' actions is important for a small business. A mobile dog-grooming business, Paws at Home, finds that a rival has begun visiting the...
Question 1 Report
Figuring out competitors' actions is important for a small business. A mobile dog-grooming business, Paws at Home, finds that a rival has begun visiting the same villages on Saturdays. Paws at Home has an objective to increase market share, but customers say they choose groomers based on safety, appointment times and the treatment of pets, not only on pricing.
(a) Identify one source of information Paws at Home could use to monitor its rival. [1]
(b) When would extending appointment hours be an effective competitive response? [1]
(c) Explain one risk of extending appointment hours. [3]
Answer Details
(a) Paws at Home could monitor the rival's website. [1] Other acceptable sources include social media, customer surveys, mystery shopping, or local advertising.
(b) Extending appointment hours would be effective when market research shows that customers want appointments outside the current hours and there is sufficient demand for those appointments. [1] The response must match what customers value, rather than simply copying a competitor.
(c) Longer hours may require staff to work more hours and may increase fuel costs for a mobile service. [1] However, the additional appointments may not produce enough extra sales to cover these extra costs. [1] Therefore, profit could fall even if Paws at Home gains some customers. [1] This is a cost, revenue, then profit chain.
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