Question

a company is attempting to analyse its competitive environment.which of the following models would be most appropriate for it to use?

Answer 1

Answer:

The competitive environment in which the SME operates affects the chance of survival (Storey and Cressy, 1995). Market uncertainty is high in most SMEs as they tend to have a smaller share of the market, to have one or two major customers and are hence less able to influence price. SMEs tend to be price-takers. The high market share of large firms means that they usually determine prices. An additional danger for SMEs is from those large firms that enter a market and can compete on price. Thus, many SMEs operate in classic perfect competition (Storey and Sykes, 1996). There are a few SMEs that compete in slim market niches where there is little or no competition.

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