Competitive Factors Affecting Business..!!

1. COMPETITIVE
FACTORS AFFECTING
BUSINESS

2. A:- The Threat of New Entrants
Examples Include:
 Existing Loyalty to a major Brand
 Incentives for using a particular Brand
 High Fixed Costs
 Scarcity of Resources
 High Costs of Switching Companies
 Government Restrictions or Legislations

3. B:- The Power of Buyers
Examples Include:
 Small Numbers of Buyers
 Large Volume Purchases
 Switching to a competitive world is simple
 Product is not Extremely important to buyers ;they can do without a
product for a period of time
 Customers are price Sensitive

4. C:- The Availability of Substitutes
What is the likelihood that someone will switch to a competitive product or
service?
Examples Include:
 Switching to a Competitors Product is Costly
 Switching to a Competitors Product is Easy and Cheap
 No Substitutes and the Product is Extremely important to the Buyers- can’t do
without it
 No Substitutes and the Product is unimportant to buyers- can’t do without it

5. D:- Power of Suppliers
Examples Include:
 Few Suppliers of a particular product
 Numerous Suppliers of a particular product

8. A Business could react to an increase in competition(e.g. a launch rival
product)
in the following ways:
 Cut Prices (but can reduce profits)
 Improve Quality (but increases cost)
 Spend more on Promotion (e.g. do more advertising, increase brand
loyalty; but costs money.
 Cut Costs (e.g. use cheaper materials, make some workers redundant)