Competitive Environment
Resumen
The only water seller at a remote bus station can charge almost anything. The fourteenth coffee shop on a city street cannot charge a cent more than the thirteen around it, and has to work out what else it can offer instead. Same product, same country, same year. What separates them is not skill or effort. It is how many other people the customer could have bought from.
This topic has two objectives and both of them are about living with things you do not control. In this lesson you will learn what a market and competition actually mean, what competition does to a business's prices, costs, quality and profit, and when a business faces very little of it. Then you will look at risk and uncertainty: why every business faces them, what an entrepreneur is being paid for when they accept them, what a business can do to reduce them, and how producers in developing countries use a lower cost advantage to compete with established rivals in richer ones.
Objetivos
- Impact on businesses of operating in competitive markets.
- Uncertainty and risks businesses face.
Mapa mental
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Nota de la lección
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Evaluación de la lección
Felicitaciones por completar la lección del Competitive Environment. Ahora que has explorado el conceptos e ideas clave, es hora de poner a prueba tus conocimientos. Esta sección ofrece una variedad de prácticas Preguntas diseñadas para reforzar su comprensión y ayudarle a evaluar su comprensión del material.
Te encontrarás con una variedad de tipos de preguntas, incluyendo preguntas de opción múltiple, preguntas de respuesta corta y preguntas de ensayo. Cada pregunta está cuidadosamente diseñada para evaluar diferentes aspectos de tu conocimiento y habilidades de pensamiento crítico.
Utiliza esta sección de evaluación como una oportunidad para reforzar tu comprensión del tema e identificar cualquier área en la que puedas necesitar un estudio adicional. No te desanimes por los desafíos que encuentres; en su lugar, míralos como oportunidades para el crecimiento y la mejora.
- Which one of the following businesses is most likely to face minimal competition? A. A bakery on a busy high street B. A mobile phone shop in a shopping centre C. The only petrol station for eighty kilometres D. A hairdresser in a large city Answer: C
- Which one of the following is the most likely effect of increased competition on a business? A. It can raise its prices freely B. It faces pressure to lower prices or improve quality C. Its fixed costs fall D. Its suppliers give it longer credit Answer: B
- Which one of the following is a barrier to entry into a market? A. A large number of existing customers B. Low start-up costs C. The need for a government licence that is rarely granted D. Weak brand loyalty among customers Answer: C
- Which one of the following actions genuinely reduces a business's risk rather than transferring it to someone else? A. Carrying out market research before launching a product B. Forming a limited company C. Insuring the delivery vehicles D. Signing a fixed price contract with a supplier Answer: A
- How do businesses in developing countries most commonly compete with those in developed countries? A. Through a lower cost advantage B. Through higher wages C. Through longer established brands D. Through stricter regulation Answer: A
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