1.2.4 The competitive environment - Word Drop

A ______ is a group of customers with similar needs. Competition occurs when two or more businesses target the same market with similar products. To remain ______, a business must analyse the strengths and ______ of its rivals, such as poor quality or weak service. This comparison helps a business make better ______ about its own offer.

Businesses usually compare competitors in five main areas. A business may set a low ______ to attract customers, but this can reduce the money it makes on each sale. Superior ______ can support a higher price, while lower quality appeals to budget customers. ______ matters because a convenient site can increase footfall.

A wide ______ can attract different customer groups. Friendly staff and helpful advice are part of good ______, which builds loyalty and repeat sales. After comparing these factors, a business may change its prices, improve quality, move site, adjust range or train staff. Competition can force businesses to ______, but it can also reduce sales and pressure profits.