Level 2 business and economics activities are designed to be used with a wide range of courses, including GCSE Business courses, Applied Business at GCSE, BTEC First Diploma in Business, GCSE Economics courses and the GCSE Business and Economics (Nuffield) course.
Knowing your Competition - Introduction
No business operates in isolation; whatever they are producing, there will be other businesses and organisations that would be looking to provide similar products or services.
Businesses are in competition with these other businesses for customers. You will want customers to buy your goods or services but if you ignore what other firms are doing, you may well lose customers. Knowing who your competition is and monitoring what they do is therefore very important.
The digital download music industry might seem like a growth area, but how many competitors are there in the market? Would this put off market entrant? © iStock.com
Business will try to keep an eye on their competitors by looking at the following areas:
- Who is the competition? - Which other firms supply the same or similar goods and services?
- Where is the competition based? - This will focus on whether the competition is local, regional, national, European or international.
- What does the competition look like? - This will include looking at market share, how many other competitors there are what the competition has been in the past and what it might be in the future.
- What is the business's market position? - This will involve looking at the products the firm sells, customer service, branding, reputation and image and what the strengths and weaknesses of the business might be.
- How will the business react to its competition? - This looks at strategies the business might adopt to respond to competition.