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2021 BTEC Business Level 3:
Unit 1 - Exploring Business
(DISTINCTION*) Assignment
2
C3: Competitive environment
A competitive environment is the dynamic external system in
which a business competes and functions. The more sellers of a
similar product or service, the more competition there will be in
the environment in which they compete1 Therefore Nike’s
competitive environment will be more intense due to the huge
variety of products Nike sells such as shoes, clothes and
equipment. Furthermore, the more products Nike sells the more
competition they will have as there will be more business which
would be selling the similar goods, therefore they will compete
against Nike; because of Nike’s huge variety, their profits will be
decreasing as customers will be purchasing from Nike due to their
high quality goods and an affordable price. Moreover, Nike’s
geographic market consists of major markets throughout the
globe.2 Nike has an intense competitive environment due to sales,
profit, market share and target market they own which makes
their business successful. Because of Nike’s well operated
business other sports businesses such as Adidas will be
competing against Nike based on sales and quality. Adidas will try
to produce the same quality as Nike so they can make more profit
and become successful.
, Nike’s main competition are Adidas and Reebok along with many
small companies such as New
Balance, K-Swiss, etc. Due to
Nike’s huge brand awareness,
Nike’s competitors will have to put
in more effort to sell their
products and also new entrants in
the industry should have a huge
amount of capital to invest in advertising to create brand
awareness and to become a significant if not a major player. This
restricts the amount of entrants in the market. 3
Local competitors mean any company that provides goods and
services to a local population.
Local competitions of Nike are all the business in a local area
where Nike stores are built such as stores that sell sports
equipment, clothes and shoes; stores such as JD, Sports direct
and Adidas. The local competitors will compete with Nike and try
to provide better service which will attract customers towards
their stores. The local competitors want to benefit and make their
business successful rather than their opponent’s business which
is Nike, as Nike receives more revenue than any other business’.
In order to do this, the competitors will try to produce the same
style or quality of products as Nike so they can receive as much
profit as possible. They might also follow the same ethical views
as Nike in order to receive the same loyalty Nike receives from
their customers. This would help other businesses as they will
start to receive more customers and the more customers they
receive the more purchases would be made therefore there will
be an increase in the business’ revenue which will make them
successful.
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