Impact of competition on business decision making
All businesses are affected in some way by their competitors, and this may have an impact on the decisions businesses make. For example, if two businesses offer the same product and one of the businesses offers a discount for a limited time, the other business may need to do the same. Similarly, if a business brings out a new product (eg a seasonal coffee that will be available for a limited time only), its competitors may also wish to bring out a limited-edition drink.
between businesses is good for customers because it means that businesses have to offer products and services at the right . It also means that businesses need to keep updating and bringing out new products and services through . For example, if two florists are next door to each other, they will each need to make sure their products are the best quality they can be with the aim of attracting more customers than the other business. In addition, if one of the businesses charges a higher price for a very similar product, that business will lose customers.
Competitors can be problematic for businesses. For example, some competition can be territorial (within the same location or area), where one business tries to force other businesses to close down by setting its prices extremely low or putting on offers that other businesses can’t compete with. For example, if two driving instructors operate in the same area and one offers ten lessons for £100 but the other offers ten lessons for £280, the more expensive instructor is unlikely to be able to compete with the cheaper one.
