1. Changing the competitive environment
External Influences

2. Learning Objectives
A To evaluate why C To analyse why E To understand why

3. Starter What is a competition?
What benefits does competition in a market bring to customers?
Why does the Government try and encourage competition?

4. Changing the Competitive environment
Businesses can change how competitive a market is by what they do:
Increasing competition
Reducing competition

5. Task
In pairs you are to give examples of how competition can be increased and reasons why

6. How to increase competition in a m market
New firms entering the market – increases number of sellers. Prices will fall
Privatisation – Government owned businesses are sold to private owners
Selling new products – existing firms can increase competition by introducing new products & services
Cutting Prices – reduce prices and increase sales
Increase advertising – persuades customers to buy from them

7. How to reduce competition in a market
Takeovers/ mergers – Takeover is where one firm buys out the majority of shares of the other firm and takes them over. A merger is where 2 firms agree to join together
Using the Marketing mix – firms can promote products to create brands, though it is not easy. This can lead to internal growth
Patents & copyrights – patents mean that no other firm can copy the product or process with permission of the patent holder. A copyright is a similar restriction but applies to artistic creation such as books, music

8. How to reduce competition in a market
Collusion – firms agreeing to charge the same price for a product rather than compete and sell at lower prices. This is illegal
Internal Growth – increasing sales can help growth. If this is at the expense of other firms, competition falls

9. Exam Questions
Does the Government prefer competitive markets rather than a monopoly? Explain your answer (6)
Explain the difference between a patent and copyright? (4)

10. Plenary What were our learning objectives? Have we achieved them?
A target for next lesson is…
To improve I need to………