2.6 The competitive environment

Helen Johnson
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Year 10 Business Studies (Section 2) Mind Map on 2.6 The competitive environment, created by Helen Johnson on 04/06/2018.

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Helen Johnson
Created by Helen Johnson over 1 year ago
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2.6 The competitive environment
1 Keywords
1.1 Markets

Annotations:

  • Where there are buyers and sellers.
1.2 Market Share

Annotations:

  • The percentage of sales in a particular market recorded by a business.
1.3 Uncertainty

Annotations:

  • When there is a lack of information about a situation meaning the outcome or consequences are difficult to predict. 
1.4 Recession

Annotations:

  • When the value of the economy's output of goods and services falls for six months or longer.
1.5 Competition

Annotations:

  • When more than one business is trying to attract the same customers.
1.6 Business plan

Annotations:

  • A document setting out what a business does and what it helps to achieve in the future.
1.7 Entrepreneur

Annotations:

  • Someone who is willing to take risks involved in starting a new business.
1.8 Monopoly

Annotations:

  • When a business doesn't face any competition in a particular market.
1.9 Diversification

Annotations:

  • When a business starts selling products in new markets.
1.10 Contract of employment

Annotations:

  • A legal document stating the hours, rates of pay, duties and the other conditions under which a person is employed.
2 What is a market?
2.1 A market exists where there are buyers and sellers who come together to exchange goods and services for a price.
2.2 A market can be geographical, such as a high street, or online, e.g. websites for music and film downloads.
2.3 Markets can be local, such as convenience shops, or global, such as selling cars around the world.
3 What is competition?
3.1 Competition can be local or national.
3.2 Competition exists when more than one business is attempting to attract the same customers.
3.3 The more businesses provide the same goods or services the more competitive the markets.
4 Levels of competition
4.1 For some businesses there are very few rivals, but for others there is strong competition.
4.2 A monopoly exists when a business does not face any competition in a particular market.
4.3 Water companies in the UK currently have no other companies to compete against.
5 Competition in market with few businessses
5.1 Market share is the percentage of sales in a particular market that a business controls.
5.2 Globalisation has meant that many UK markets are dominated by a small number of businesses who have a large market share.
6 Different ways of competing.
6.1 Price competition means businesses avoid competing strongly on price with larger rivals as this will cause lower profits.
6.2 Competing by developing new products aims to attract customers from competitors, e.g. the games console, Nintendo Switch, can be used on the go or at home.
6.3 Competing through advertising happens when consumers in the market switch brands regularly, so they may be attracted by a large amount of advertising, e.g. the car insurance market is very competitive, so companies like Direct line advertise to sttract new customers.

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