Business Competition

Learning Objectives: To learn: •What is meant by business competition•How a business competes•How a business targets its customers

Learning Outcome: You will understand how business competition works and be able start applying it to the businesses you are studying.

15th October 2008 Year 11 - Business Studies

StarterWHICH ONE IS YOUR FAVOURITE?

Q. When a customer decides to buy a Cadburys chocolate bar rather than one of their rivals, what must the business make efforts to do?

A. Encourage R______ B_________

Who makes these brands of Cereals?1. Coco Pops

2. Frosties

3. Shreddies

4. Weetabix

5. Cheerios1. Kelloggs

2. Kelloggs

3. Nestle

4. Own Brand

5. Nestle/General Mills

Competition

• Nearly all businesses face competition from other businesses.• What business wouldn’t be affected by competition?

• Would this be long or short lived?

Definition: Competition is where a number of businesses try to sell their products to the same group of people, attempting to win their custom at the expense of their rivals.

Kawasaki vs. Suzuki

Who are Apples competitors?

1. Quality and statusThe price of a product gives a signal about the ______ and _______

2. Availability“WHEN I WANT!”Businesses try to win customers by making sure their products/services are available where they want them.

“WHERE I WANT!”Being available when customers want products or services is also important What kind of pressure can this put on smaller shops? HINT: opening times, stock space

3 WAYS TO COMPETE:

Versus

3. Price•Sometimes customers just want to buy the cheapest service or products available, whether it’s a phone tariff or a bag of sweets.

•In markets where businesses have close rivals, a business must make sure that their prices are similar to the competition.

If not, what could happen?

What could happen if they charged slightly lower prices?

Identifying Competitors

In order to compete with it’s rivals, a business needs to identify them.

This can be done by finding who offers similar PRODUCTS or BENEFITS

…and by remembering that businesses can trade on LOCAL, NATIONAL and/or INTERNATIONAL levels so a business should remember that competitors can come from all over the world.

HOW?

Competition & Technology

•Developments in technology have made markets more open to competition from a range of businesses e.g. The growth in air transport creates an international market for fruits and vegetables because they can now be transported globally by air – quickly!

•The growth in Information Communication Technology (ICT) has allowed the sale of products and services on the internet meaning a business in one country can compete by SELLING worldwide without having a factory or office in that country.

THINKING POINT - you could have a purely virtual business, particularly where a business offers services.

Activity 1: Learning check

Write the answers on your worksheets1. In one sentence, explain why businesses need to compete Businesses need to complete because they must keep their existing customers and try to win new ones if they are to remain in business.

2. Identify 3 ways in which businesses compete for customers 1. Price 2. Quality 3. Availability

3. Complete the sentence:Businesses are able to identify their competition by examining those businesses offering the same a)._________ and the same b).________ to customers.

a) Products. b) benefits.

4. Give 2 examples of technology increasing competition for business.

1. ICT developments leading to web based sales. 2. Air transport being more widely available for moving goods around the world

How does a business target it’s customers?

• Some goods are aimed at all customers e.g. Staple goods. Examples… Businesses selling these don’t always have to carefully plan for who will buy their products

• Most products are aimed at particular consumers and the majority of purchases would be bought by the people in the Target Group.

By targeting products at certain consumers, businesses can better meet their needs

This way, Businesses

can increase sales and gain more

loyal customers

Clearly identified groups of

consumers are called MARKET

SEGMENTS

MARKET SEGMENTS

Identifying CustomersCustomers can be grouped in various ways...

MARKET SEGMENTS

AGE

LIFESTYLE

LOCATION

INCOME

GENDER

HINTS:Infants, teenagers, over 80’s.Clothes, food, drinks

HINTS: Socializing, holidays, celebs, civilians, outdoors or indoors.

HINTS: wellies vs. Heels. Yorkshire pudding vs. haggis

HINTS: Cars, or diamonds. Fashion or football

HINTS: Luxury vs. Budget

Learning check

1. Complete the sentence: Businesses aim their products at clearly identified groups of

consumers known as _______ _______

2. Give one reason why businesses target their products at a particular group of customers.

ACTIVITY 2 – In pairs Complete Activity 2 on the worksheets

ACTIVITY 3 – Independent task Complete Activity 3 using your chosen businesses

Hands up!

1. Complete the worksheet from class if you haven’t already.

2. Research how competition effects your businesses using the media. I will be checking individually next lesson, anyone

without these tasks completed will be given an instant C2