Download - Business PPT
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COMPETITIVE FACTORS
AFFECTING BUSINESS
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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
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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
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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
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D:- Power of Suppliers
Examples Include:
Few Suppliers of a particular product
Numerous Suppliers of a particular product
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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)
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THANK YOU
ANY QUESTIONS
?