17 Questions
What kind of market structure is characterized by a single firm controlling the entire market?
Monopoly
Which market structure allows firms to set prices due to the dominance of a small number of firms?
Oligopoly
In which market structure do firms sell similar but slightly differentiated products with free entry and exit?
Monopolistic competition
What is the defining characteristic of a monopoly market structure?
A single firm controls the entire market
Which market structure is described by a large number of small firms competing against each other, selling identical products, and having free entry and exit?
Perfect competition
How can a firm gain a competitive advantage over competitors?
By offering consumers greater value like lower prices or by providing greater benefits and service
What characterizes an oligopoly market structure?
Limited number of dominant firms setting prices
What are the different types of competitors discussed in the text?
Direct, Indirect, Substitute
How can a firm maintain a competitive advantage according to the text?
By knowing everything about competitors such as their product/service, price, opinion of customers, image of their brand, and their future plans
How can a firm gather information about competitors according to the text?
Official publications from competitors, social media, information through suppliers or intermediaries, past customers now in the company, online reviews
What is customer behavior in the context of competitive advantage?
How consumers think and feel about different alternatives and how they reason and select between them
What is the first step in the buying process according to the text?
Problem recognition
What is the primary objective of conducting a SWOT analysis?
To make a summary analysis of external and internal factors
Which of the following is considered a strength in a SWOT analysis?
Highly skilled workforce
What do opportunities represent in a SWOT analysis?
Situations that are out of the company's control and can be exploited
Which of the following is a competitive advantage that would be considered a strength in a SWOT analysis?
Patented technology
What is the purpose of identifying threats in a SWOT analysis?
To identify external factors that can damage the company
Study Notes
Market Structure
- Firms can set prices in a market with high barriers to entry and exit.
- Competitors can be categorized into direct, indirect, and substitute competitors.
- A competitive advantage is an advantage over competitors gained by offering consumers greater value, such as lower prices or better service.
Understanding Competitors
- To maintain a competitive advantage, companies must continuously gather information about their competitors, including their products, prices, customer opinions, brand image, and future plans.
- Information can be gathered through official publications, suppliers, intermediaries, past customers, and online reviews.
Customer Behavior
- Customer behavior involves how consumers think, feel, and decide between different alternatives (brands, products, services, and retailers).
- It is influenced by environment (peers, culture, media) and can be improved through marketing campaigns.
Buying Process
- The buying process consists of:
- Problem recognition
- Information search
- Evaluation of alternatives
- Buying decision
Micro Environment
- The micro environment consists of factors close to the company, including suppliers, competitors, intermediaries, and customers.
- Suppliers provide resources needed by the company to produce goods and services.
- Intermediaries help promote, sell, and distribute goods and services to final buyers.
Market Structure
- The market structure refers to the characteristics of the market, including organizational and competitive features.
- Types of market structures include:
- Perfect competition: many small firms compete, selling identical products with free entry and exit.
- Monopolistic competition: many small firms compete, selling similar but differentiated products with free entry and exit.
- Oligopoly: a few firms dominate the market, selling homogeneous or differentiated products with barriers to entry and exit.
- Monopoly: a single firm controls the entire market.
SWOT Analysis
- SWOT analysis is a strategic planning tool that provides a clear and visual picture of a company's situation.
- It involves analyzing internal strengths and weaknesses, and external opportunities and threats.
- Objectives of SWOT analysis include setting priorities, establishing strategies, and preparing options for risks and problems.
Test your knowledge on market competition, barriers to entry and exit, competitors, types of competitive advantage, and strategies for maintaining a competitive edge in the market.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
