Understanding the Business Environment: Micro Environment Core Concepts

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What does the micro environment of a business typically include?

Customers, suppliers, competitors

CBOs, NGOs, unions

Government regulations, economic conditions

Vision, mission, goals, objectives (correct)

Which skills are essential for effectively managing the micro environment of a business?

Customer service, marketing, sales

Research and development, production management, supply chain

Strategic planning, effective communication, leadership (correct)

Legal knowledge, financial expertise, IT proficiency

What values are important in the micro environment of a business?

Employee turnover, low morale, high absenteeism

Profit maximization, cost-cutting, market dominance

Productivity, efficiency, innovation

Ethical conduct, responsibility, commitment to vision and mission (correct)

Which factors make up the market environment of a business?

Customers, suppliers, intermediaries Signup and view all the answers

What is crucial for a business to understand regarding the market environment?

Interacting with customers, suppliers, competitors Signup and view all the answers

How do the values in the micro environment contribute to a business's success?

By ensuring a cohesive work culture aligned with strategic objectives Signup and view all the answers

What are some key skills vital for navigating the market environment?

Analytical skills, adaptability, foresight, and strategic planning Signup and view all the answers

Which values guide interactions within the market environment according to the text?

Trust, integrity, fairness Signup and view all the answers

What are some core concepts of the macro environment mentioned in the text?

Political, economic, social, technological, legal, and environmental factors Signup and view all the answers

How can businesses navigate the challenges of the market environment?

By understanding consumer behavior and monitoring competitor actions Signup and view all the answers

Which of the following is a common challenge in the micro environment mentioned in the text?

Difficult employees causing conflicts Signup and view all the answers

What can a lack of reliable suppliers lead to according to the text?

Disruption in production Signup and view all the answers

Why is it important for businesses to adapt their offerings and marketing strategies?

To remain relevant as consumer preferences evolve Signup and view all the answers

How can businesses deal with conflicts arising from difficult employees?

By providing regular workshops and relevant training courses Signup and view all the answers

What does the macro environment encompass according to the text?

Broad external conditions beyond business control Signup and view all the answers

What are some values that reflect a business's role in the broader macro environment?

Engagement with global issues like sustainability Signup and view all the answers

What is a key challenge businesses face regarding changes in the population's characteristics and consumers' lifestyles?

Changes in income levels Signup and view all the answers

How can businesses overcome challenges related to the expansion into international markets?

Emphasizing global citizenship and diversity Signup and view all the answers

What is a strategic response that aids businesses in anticipating and responding to challenges?

Developing plans for sustainability Signup and view all the answers

Which corporate action involves combining resources, acquiring new capabilities, or forming strategic partnerships?

Mergers, takeovers, acquisitions, and alliances Signup and view all the answers

What is crucial for businesses to collect, store, and use data efficiently for better decision-making?

Investing in modern information technology systems Signup and view all the answers

Why is adaptability important for businesses in dynamic environments?

It allows businesses to respond to changes effectively Signup and view all the answers

What type of structure is essential for businesses to reconfigure in response to environmental changes?

Adaptive organizational structure Signup and view all the answers

How do mergers, acquisitions, and alliances contribute to businesses' competitive advantage?

By combining resources and acquiring new capabilities Signup and view all the answers

Why do businesses need to adapt to changes in the population's characteristics and consumers' lifestyles?

To target marketing efforts effectively Signup and view all the answers

What role does social responsibility play in contributing to a business's competitive advantage?

Contributes to a competitive advantage Signup and view all the answers

What is a key benefit of businesses engaging in environmental-friendly practices and community upliftment programs?

Enhancing stakeholder value Signup and view all the answers

How can businesses navigate the complexities of micro, market, and macro environments effectively?

By leveraging information management, strategic planning, and maintaining flexible organizational designs Signup and view all the answers

How do economic crimes and ethical misconduct impact businesses?

Tarnishing the company's image and leading to financial losses Signup and view all the answers

What challenge does rapid population growth pose for businesses?

Pressure to scale operations while managing limited natural resources Signup and view all the answers

How do socio-cultural and demographic shifts affect businesses?

Influence consumer behavior and spending patterns, requiring adaptation of marketing strategies Signup and view all the answers

What is a critical aspect for businesses in navigating labour strikes and industrial actions?

Understanding the Labour Relations Act and engaging with trade unions Signup and view all the answers

How do intellectual property rights protect businesses?

By safeguarding their intellectual assets against unlawful reproduction and use Signup and view all the answers

Why is it important for businesses to enforce copyright, patent, and trademark laws?

To protect intellectual assets against unlawful reproduction Signup and view all the answers

What is a result of ethical misconduct such as sexual harassment on businesses?

Reduced investor confidence and financial losses Signup and view all the answers

How does understanding ethical misconduct help in business operations?

By maintaining business integrity and operational efficiency Signup and view all the answers

Which sector deals with the extraction and collection of natural resources?

Primary sector Signup and view all the answers

What is the primary function of the secondary sector?

Manufacturing goods Signup and view all the answers

Which sector focuses on offering services rather than goods?

Tertiary sector Signup and view all the answers

In which industry would you find timber used in construction and paper manufacturing?

Forestry industry Signup and view all the answers

Which sector relies directly on the primary sector for its raw material inputs?

Secondary sector Signup and view all the answers

What is the role of the tertiary sector in economic activities?

Providing services Signup and view all the answers

Which sector involves activities like fishing and agriculture?

Primary sector Signup and view all the answers

What is the primary focus of the tertiary sector?

Offering services Signup and view all the answers

Which of the following sectors adds value to raw materials from the primary sector?

Secondary sector Signup and view all the answers

Why is the primary sector crucial for other sectors in the economy?

It supplies raw materials needed by other sectors. Signup and view all the answers

Which form of business ownership offers advantages such as liability protection, continuity, capital acquisition, and potential tax benefits?

Companies Signup and view all the answers

What is a disadvantage associated with franchising?

Limited operational autonomy Signup and view all the answers

What does outsourcing involve?

Hiring external organizations to perform specific business functions Signup and view all the answers

One of the advantages of leasing is:

Tax benefits as lease payments can be deducted Signup and view all the answers

Which avenue for acquiring businesses provides access to a proven business model and brand recognition?

Franchising Signup and view all the answers

What is a contractual implication of outsourcing?

Detailed service level agreements outlining scope, quality, and timelines of work Signup and view all the answers

What is a potential disadvantage of leasing?

Possibility of restrictions imposed by the lease agreement Signup and view all the answers

What does franchising involve?

Hiring internal organizations to perform business functions Signup and view all the answers

What is an advantage associated with outsourcing?

Access to specialized skills and technologies Signup and view all the answers

What is a contractual implication of franchising?

Payment of initial fees and ongoing royalties Signup and view all the answers

What is a primary advantage of establishing a company over sole proprietorships and partnerships?

Limited liability protection Signup and view all the answers

Which characteristic distinguishes companies from sole proprietorships and partnerships in terms of continuity?

Perpetual existence Signup and view all the answers

What is a key advantage companies have over sole proprietorships and partnerships in terms of capital acquisition?

Issuing shares and bonds Signup and view all the answers

In terms of taxation, how do companies differ from sole proprietors and partners?

May benefit from tax-deductible expenses Signup and view all the answers

What is a primary challenge associated with establishing a company?

Complexity and cost of formation Signup and view all the answers

Why is limited liability protection considered a significant advantage for companies?

Protection against business debts and liabilities Signup and view all the answers

Which factor contributes to the continuity of companies despite changes in ownership or management?

Perpetual existence Signup and view all the answers

What aspects are encapsulated within the micro environment of a business?

Vision, mission, goals, and resources Signup and view all the answers

Which skills are necessary for effectively managing the micro environment of a business?

Strategic planning and decision-making Signup and view all the answers

What do values in the micro environment of a business relate to?

Ethical conduct and commitment to vision Signup and view all the answers

Which external factors make up the market environment of a business?

Customers, competitors, and suppliers Signup and view all the answers

What is crucial for a business's market positioning and competitiveness?

Interacting with customers and suppliers Signup and view all the answers

Which of the following is under a business's direct control in the micro environment?

Organizational culture Signup and view all the answers

What is a potential challenge for businesses due to evolving consumer preferences?

Stagnant market share Signup and view all the answers

Which of the following is a key challenge associated with the market environment according to the text?

Changes in consumer behavior Signup and view all the answers

Why is understanding and effectively managing the micro, market, and macro environments crucial for business success?

To anticipate and adapt to external conditions Signup and view all the answers

What is a common challenge businesses face within the micro environment?

Difficult employees Signup and view all the answers

How can businesses address the challenge of a lack of reliable suppliers in the market environment?

Implement strategic alliances Signup and view all the answers

What can a lack of motivation among employees lead to in a business according to the text?

Lower productivity Signup and view all the answers

Why do trade unions sometimes present challenges for businesses?

By protecting workers' rights with demands that may halt productivity Signup and view all the answers

What is a key challenge for businesses due to the presence of competitors offering similar or superior products?

Impact on market share Signup and view all the answers

Which core concept is essential for businesses to manage the impact of the macro environment according to the text?

Adaptability and strategic planning Signup and view all the answers

How do evolving consumer preferences affect businesses?

By requiring adaptation of offerings and marketing strategies Signup and view all the answers

What is an essential advantage of businesses engaging in environmental-friendly practices and community upliftment programs?

Enhancing the business's reputation and stakeholder value Signup and view all the answers

Which action can significantly impact a business's ability to control its environment and behavior of others?

Forming power relations through strategic alliances Signup and view all the answers

How does understanding and enforcing copyright, patent, and trademark laws benefit businesses?

Safeguarding intellectual assets against unlawful use Signup and view all the answers

What poses a significant risk to business integrity and operational efficiency in terms of ethical misconduct?

Fraud, corruption, and sexual harassment Signup and view all the answers

Which factor exerts pressure on businesses to scale operations while managing limited natural resources efficiently?

Population growth Signup and view all the answers

What helps businesses tackle challenges of resource scarcity and environmental degradation?

Efficient resource management and green technologies Signup and view all the answers

How do socio-cultural and demographic shifts influence businesses?

By changing consumer behavior and spending patterns Signup and view all the answers

What is a key challenge for businesses related to industrial action like labor strikes?

Financial losses and operational disruptions. Signup and view all the answers

What can be a result of unethical misconduct such as mismanagement of funds on a business?

Tarnishing the company's image. Signup and view all the answers

What is a common challenge businesses face due to changes in income levels?

Negative impact on business sales and profitability Signup and view all the answers

Why is it important for businesses to adapt to different cultural and legal environments when expanding internationally?

To adjust to varying norms and regulations Signup and view all the answers

What do businesses need to emphasize to gain a competitive advantage and long-term success?

Innovation, sustainability, and social responsibility Signup and view all the answers

What is essential for businesses to do in response to challenges or opportunities in the environment?

Form strategic partnerships Signup and view all the answers

Why is an adaptive organizational structure crucial for businesses?

To reconfigure processes and strategies as needed Signup and view all the answers

What type of business move involves combining resources, acquiring new capabilities, or forming strategic partnerships?

Mergers, takeovers, acquisitions, and alliances Signup and view all the answers

How can businesses improve decision-making through effective information management?

By investing in modern information technology systems Signup and view all the answers

What is a key factor that influences consumer preferences and regulatory requirements for businesses?

Growing concerns about sustainability and environmental impact Signup and view all the answers

Why do businesses need to employ strategic planning?

To anticipate and respond to internal and external challenges Signup and view all the answers

What does adapting to changes in the population's characteristics and consumers' lifestyles involve for businesses?

Being proactive and evolving marketing efforts Signup and view all the answers

What is a key benefit of limited liability for company owners?

Protection of personal assets from business debts Signup and view all the answers

Which factor distinguishes companies from sole proprietorships and partnerships regarding continuity?

Perpetual existence regardless of ownership changes Signup and view all the answers

What aspect of taxation do companies potentially benefit from compared to sole proprietors and partners?

Corporate tax rates and deductible expenses Signup and view all the answers

What is a significant advantage of company formation over other ownership forms in terms of attracting investors?

Limited liability protection Signup and view all the answers

Which characteristic of companies facilitates investment and growth by allowing transfers?

Ease of transferring shares Signup and view all the answers

What is a challenge associated with conflicts among shareholders in a company?

Potential disruptions to business operations Signup and view all the answers

Why are corporate tax rates advantageous for companies compared to individual taxation rates for sole proprietors?

Availability of tax-deductible expenses Signup and view all the answers

How does perpetual existence benefit companies compared to other forms of ownership?

'Continuity' regardless of ownership changes Signup and view all the answers

5

Correct Option One Signup and view all the answers

What is the primary function of the tertiary sector?

Offering services Signup and view all the answers

How does the primary sector contribute to the secondary sector?

Providing raw materials for processing Signup and view all the answers

Which sector relies on the primary sector for inputs?

Secondary sector Signup and view all the answers

What is a characteristic of the secondary sector?

Transforming raw materials Signup and view all the answers

Which industry benefits from services like transportation and banking?

Agriculture Signup and view all the answers

How does the tertiary sector contribute to economic activities?

By offering financial and retail services Signup and view all the answers

Which sector focuses on transforming raw materials into goods?

Secondary sector Signup and view all the answers

What is the crucial role of the primary sector in the economy?

Supplying raw materials Signup and view all the answers

What is the primary consideration regarding double taxation of dividends for public companies?

Taxation on profits and shareholder dividends Signup and view all the answers

Which avenue of acquiring a business involves renting assets from another party?

Leasing Signup and view all the answers

What is a disadvantage of outsourcing for businesses?

Dependence on vendor's reliability Signup and view all the answers

What does franchising offer in terms of advantages for entrepreneurs?

Brand recognition and training from the franchisor Signup and view all the answers

In leasing, what is a disadvantage faced by the lessee?

Lack of ownership of the asset Signup and view all the answers

What is a key contractual implication associated with franchising?

Payment of initial fees and ongoing royalties Signup and view all the answers

Which characteristic distinguishes outsourcing from other avenues of acquiring businesses?

Dependence on third-party providers Signup and view all the answers

What encapsulates elements within a business's direct control?

Micro environment Signup and view all the answers

Which environment consists of external factors like customers, suppliers, and competitors?

Market environment Signup and view all the answers

Which aspect plays a crucial role in shaping the business's direction and operational efficiency?

Management style Signup and view all the answers

What skills are vital for effectively managing the micro environment of a business?

Leadership and decision-making skills Signup and view all the answers

What do values in the micro environment relate to?

Ethical conduct and responsibility Signup and view all the answers

What key skills are essential for effectively managing the impact of the macro environment?

Analytical skills and adaptability Signup and view all the answers

How can businesses navigate challenges related to the shortage of suppliers in the market environment?

By investing in automation Signup and view all the answers

What is a common challenge businesses face in dealing with trade unions and industrial actions?

Worker strikes or go-slows Signup and view all the answers

What values guide interactions within the market environment according to the text?

Trust, integrity, and fairness Signup and view all the answers

Why do businesses need to continually scan the external environment according to the text?

To identify trends and shifts that could affect their operations Signup and view all the answers

What is a consequence of a lack of motivation among employees in a business's micro environment?

Lower productivity and hindered business objectives Signup and view all the answers

How can businesses address the challenge of evolving consumer behavior in the market environment?

By adapting their offerings and marketing strategies Signup and view all the answers

Which values reflect a business's role in the broader macro environment according to the text?

Sustainability, corporate citizenship, and social responsibility Signup and view all the answers

What is a potential challenge for businesses due to changes in consumer behavior in the market environment?

Adapting offerings and marketing strategies to remain relevant Signup and view all the answers

What is an essential skill for businesses to effectively respond to market dynamics?

Negotiation and networking Signup and view all the answers

What is crucial for businesses to target marketing efforts effectively?

Understanding demographics and psychographics Signup and view all the answers

How can businesses navigate challenges like competition with lower-cost products in international markets?

By emphasizing innovation, sustainability, and social responsibility Signup and view all the answers

What enables businesses to collect, store, and use data efficiently for better decision-making?

Investing in modern information technology systems Signup and view all the answers

What is essential for businesses to be able to reconfigure their structure, processes, and strategies to meet evolving challenges?

Organizational flexibility Signup and view all the answers

Which strategic business move allows companies to combine resources, acquire new capabilities, or form strategic partnerships?

Mergers, takeovers, acquisitions, and alliances Signup and view all the answers

What is a primary focus of businesses operating in dynamic environments?

Adapting to changes Signup and view all the answers

'Vodafone and Mannesmann Merger' is an example of what strategic business action?

'Merger' Signup and view all the answers

'Organizational flexibility' is crucial for businesses to respond to what type of changes?

'Environmental changes' Signup and view all the answers

'Strategic planning' allows businesses to anticipate and respond to what types of challenges?

'Internal and external challenges' Signup and view all the answers

'Investing in modern information technology systems' helps businesses meet customer needs and improve what?

'Market share and profitability' Signup and view all the answers

What is a potential impact of ethical misconduct like sexual harassment on businesses?

Financial losses and tarnished company image Signup and view all the answers

How does understanding intellectual property rights benefit businesses?

It protects businesses from piracy and unlawful reproduction Signup and view all the answers

Why is strategic resource management important for businesses facing resource scarcity?

To mitigate resource scarcity challenges and environmental degradation Signup and view all the answers

What is a key challenge posed by rapid population growth on businesses?

Pressure to scale operations with limited natural resources Signup and view all the answers

How do socioeconomic and demographic shifts influence businesses?

They influence consumer behavior and spending, requiring marketing strategy adaptation Signup and view all the answers

What is a consequence of labor strikes and industrial action on business operations?

Decreased productivity and financial losses Signup and view all the answers

Why is engaging in lobbying beneficial for businesses?

To influence policies and regulations to their advantage Signup and view all the answers

What benefits do environmental-friendly practices bring to businesses?

Enhanced reputation and stakeholder value Signup and view all the answers

What is a crucial aspect of navigating challenges in the business environment effectively?

Leveraging information management, strategic planning, mergers, and alliances Signup and view all the answers

How can businesses benefit from networking?

Finding new customers and sharing information Signup and view all the answers

What is a primary advantage of forming a company over sole proprietorships and partnerships?

Limited liability protection for owners Signup and view all the answers

Which aspect distinguishes companies from other forms of ownership in terms of continuity?

Perpetual existence Signup and view all the answers

What is a key reason companies have an advantage over sole proprietorships and partnerships in capital acquisition?

More avenues for raising capital Signup and view all the answers

Which factor makes company formation more complex compared to other ownership forms?

Impersonal corporate structure Signup and view all the answers

How do companies overcome the challenge of continuity that affects other forms of ownership?

By facing perpetual existence Signup and view all the answers

What advantage do companies gain over sole proprietorships and partnerships regarding tax treatment?

Corporate tax rates and deductions Signup and view all the answers

Which factor significantly distinguishes companies from sole proprietorships and partnerships regarding growth potential?

Ease of transferring ownership Signup and view all the answers

What is a crucial benefit of limited liability for company owners compared to other forms of ownership?

Protection of personal assets from business debts and liabilities Signup and view all the answers

Why might the ability to raise capital be easier for companies than for sole proprietorships and partnerships?

More avenues like issuing shares and bonds Signup and view all the answers

What role does the tertiary sector play in the economy?

Offering services instead of goods Signup and view all the answers

Which sector is responsible for electricity generation and construction?

Secondary sector Signup and view all the answers

What is the primary function of the primary sector in the economy?

Extracting and collecting natural resources Signup and view all the answers

Which sector supplies raw materials to businesses in education and publishing?

Primary sector Signup and view all the answers

Why is open communication important for positive industrial relations?

To minimize the risks of strikes Signup and view all the answers

Which industry is classified under the secondary sector?

Manufacturing Signup and view all the answers

What is the main focus of the tertiary sector?

Service provision Signup and view all the answers

What is a significant consideration for public companies due to the double taxation of dividends?

Taxation of profits and dividends Signup and view all the answers

Which avenue for acquiring businesses provides access to specialized skills and technologies?

Outsourcing Signup and view all the answers

What is a disadvantage of leasing assets for a business?

Overall cost over time may exceed purchasing cost Signup and view all the answers

In a franchising arrangement, what determines the franchisee's reputation to some extent?

Brand recognition Signup and view all the answers

What contractual implication is associated with outsourcing?

Compliance with operational guidelines Signup and view all the answers

What advantage do companies offer in terms of liability protection compared to other business forms?

Reduced exposure to financial risk Signup and view all the answers

Understanding the Business Environment: Micro Environment Core Concepts

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Questions and Answers

What does the micro environment of a business typically include?

Which skills are essential for effectively managing the micro environment of a business?

What values are important in the micro environment of a business?

Which factors make up the market environment of a business?

What is crucial for a business to understand regarding the market environment?

How do the values in the micro environment contribute to a business's success?

What are some key skills vital for navigating the market environment?

Which values guide interactions within the market environment according to the text?

What are some core concepts of the macro environment mentioned in the text?

How can businesses navigate the challenges of the market environment?

Which of the following is a common challenge in the micro environment mentioned in the text?

What can a lack of reliable suppliers lead to according to the text?

Why is it important for businesses to adapt their offerings and marketing strategies?

How can businesses deal with conflicts arising from difficult employees?

What does the macro environment encompass according to the text?

What are some values that reflect a business's role in the broader macro environment?

What is a key challenge businesses face regarding changes in the population's characteristics and consumers' lifestyles?

How can businesses overcome challenges related to the expansion into international markets?

What is a strategic response that aids businesses in anticipating and responding to challenges?

Which corporate action involves combining resources, acquiring new capabilities, or forming strategic partnerships?

What is crucial for businesses to collect, store, and use data efficiently for better decision-making?

Why is adaptability important for businesses in dynamic environments?

What type of structure is essential for businesses to reconfigure in response to environmental changes?

How do mergers, acquisitions, and alliances contribute to businesses' competitive advantage?

Why do businesses need to adapt to changes in the population's characteristics and consumers' lifestyles?

What role does social responsibility play in contributing to a business's competitive advantage?

What is a key benefit of businesses engaging in environmental-friendly practices and community upliftment programs?

How can businesses navigate the complexities of micro, market, and macro environments effectively?

How do economic crimes and ethical misconduct impact businesses?

What challenge does rapid population growth pose for businesses?

How do socio-cultural and demographic shifts affect businesses?

What is a critical aspect for businesses in navigating labour strikes and industrial actions?

How do intellectual property rights protect businesses?

Why is it important for businesses to enforce copyright, patent, and trademark laws?

What is a result of ethical misconduct such as sexual harassment on businesses?

How does understanding ethical misconduct help in business operations?

Which sector deals with the extraction and collection of natural resources?

What is the primary function of the secondary sector?

Which sector focuses on offering services rather than goods?

In which industry would you find timber used in construction and paper manufacturing?

Which sector relies directly on the primary sector for its raw material inputs?

What is the role of the tertiary sector in economic activities?

Which sector involves activities like fishing and agriculture?

What is the primary focus of the tertiary sector?

Which of the following sectors adds value to raw materials from the primary sector?

Why is the primary sector crucial for other sectors in the economy?

Which form of business ownership offers advantages such as liability protection, continuity, capital acquisition, and potential tax benefits?

What is a disadvantage associated with franchising?

What does outsourcing involve?

One of the advantages of leasing is:

Which avenue for acquiring businesses provides access to a proven business model and brand recognition?

What is a contractual implication of outsourcing?

What is a potential disadvantage of leasing?

What does franchising involve?

What is an advantage associated with outsourcing?

What is a contractual implication of franchising?

What is a primary advantage of establishing a company over sole proprietorships and partnerships?

Which characteristic distinguishes companies from sole proprietorships and partnerships in terms of continuity?

What is a key advantage companies have over sole proprietorships and partnerships in terms of capital acquisition?

In terms of taxation, how do companies differ from sole proprietors and partners?

What is a primary challenge associated with establishing a company?

Why is limited liability protection considered a significant advantage for companies?

Which factor contributes to the continuity of companies despite changes in ownership or management?

What aspects are encapsulated within the micro environment of a business?

Which skills are necessary for effectively managing the micro environment of a business?

What do values in the micro environment of a business relate to?

Which external factors make up the market environment of a business?

What is crucial for a business's market positioning and competitiveness?

Which of the following is under a business's direct control in the micro environment?

What is a potential challenge for businesses due to evolving consumer preferences?

Which of the following is a key challenge associated with the market environment according to the text?

Why is understanding and effectively managing the micro, market, and macro environments crucial for business success?

What is a common challenge businesses face within the micro environment?

How can businesses address the challenge of a lack of reliable suppliers in the market environment?

What can a lack of motivation among employees lead to in a business according to the text?

Why do trade unions sometimes present challenges for businesses?

What is a key challenge for businesses due to the presence of competitors offering similar or superior products?