A competitive business
In BUSS2, the examiners have been fond of asking students to consider the competitiveness of a
business.
‘Competitive’ means being able to compete effectively in its markets.
But what does this actually mean?
Being competitive means being as good as or better than its competitors in one or more aspects of
the business. If a business is better than others in a particular area, it can be said to have a
competitive advantage.
Some areas that might provide competitive advantage include the following. Try to think of
examples and specifically WHY or HOW the firm concerned might have a competitive advantage.
There are a few blanks for your own ideas:
Product
Pricing
Costs
Quality
Location
Staff
Service
Marketing
Reputation
Turn over
Know your competition
One of the key issues in considering the competitiveness of a business is to understand what its
competition actually IS. If you operate a small fashion outlet on a high street, this might at first seem
obvious but perhaps not when you think about the reasons why so many small shops have been
closing down.
For leisure businesses, the key thing is to attract customers to spend their leisure time (and their
money) at this attraction rather than at other different businesses that have the same overall aim.
Think of a business and list its possible competitors:
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Measuring success
As with most things in business studies, competitiveness should be measurable in terms of business
results. What are some measures that could be compared between different businesses as a
measure of competitiveness?
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What are the business’ aims?
We tend to assume that most business people are primarily motivated by profit and of course any
business at least needs to make some profit in the long term in order to cover its costs and provide a
surplus for reinvestment. The majority of businesses need to produce a good return on investment
for its owners. Neverthless, you will encounter ‘not for profit’ businesses which have other aims
whilst other small businesses provide an opportunity for their owners to pursue social aims or simply
their own interests.
SDW 30/4/12