Business and Innovation - key concepts

Creating a competitive advantage means a business can

• increase its profit margin

• meet the changing needs of the market

• copy a product produced by one of its competitors

• reduce its market share

Competitive advantage occurs when a business

• invents a new product

• can produce and sell goods or services better than its competitors

• merges with one of its competitors

• all answers are correct

A competitive market is one in which

• a large number of businesses compete with each other to satisfy the demands of a large number of customers

• a business only has one or two competitors

• businesses find it difficult to make a profit

• all answers are correct

When a business innovates they may

• come up with new ways of doing things

• alter an existing product to make it more appealing to consumers

• adopt new technological processes

The demands of customers can change due to:

• changing incomes

• changing tastes and fashions

• changing prices of complementary or substitute goods

• changes in a population's demographics (age, gender)

Coke would be an example of a _____________________ good for Pepsi.

• complementary

• substitute

Which of the following are examples of complementary goods?

• cars and petrol

• tea and coffee

• coke and pepsi

• pens and paper

Frozen vegetables are a ____________________ good for fresh vegetables.

The financial reward that a business aims to achieve in return for taking the risk of producing a good or service and attempting to sell it to customers in a market

Businesses can improve their profit margin by reducing costs such as:

• wages

• rent

• cost of raw materials

• advertising