Edexcel Business A Level Revision

Porter's Strategic mix -  describes how a company pursues competitive advantage across its chosen market segment by using four generic strategies: mass vs niche and lowest cost vs highest differentiation strategies. Competitive advantage - An advantage over the competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher price. Lost-cost positioning -  Where a business is able to operate at the lowest unit cost in the market, enabling it to charge lower prices than the competition or earn a higher profit margin Differentiation positioning - Where a business is able to distinguish its product or service in the minds of consumers as offering better value - perhaps through quality, branding or other attributes that consumers value Porter suggested two overall business strategies that could be followed in order to gain a competitive advantage: Low cost Differentiation I...

Pricing is often one of the most difficult things to get right in business. There are several factors a business needs to consider in setting a price: COMPETITORS – a huge impact on pricing decisions. The relative market shares (or market strength) of competitors influences whether a business can set prices independently, or whether it has to follow the lead shown by competitors COSTS – a business cannot ignore the cost of production or buying a product when it comes to setting a selling price. In the long-term, a business will fail if it sells for less than cost, or if its gross profit margin is too low to cover the fixed costs of the business. THE STATE OF THE MARKET FOR THE PRODUCT ( SUPPLY AND DEMAND) – if there is a high demand for the product, but a shortage of supply, then the business can put prices up. THE STATE OF THE ECONOMY (EXTERNAL SHOCKS) – some products are more sensitive to changes in unemployment and workers wages than others. Makers of luxury pr...

Market - a market is any place that buyers and sellers will come together to exchange goods or services. There will normally B an exchange of money at a set price. Niche marketing - A smaller part of a large market, with products tailored to specific customer needs. Mass marketing - A large market of customers which is undifferentiated and that sells products and services to suit a large number of consumers. Mass market features : Customers form the majority in the market large number of potential customers to attract Customers needs and wants are "general" and less "specific" Associated with higher production output (makes products in large numbers) and capacity and potential for economies of scale Success usually associated with low-cost (highly efficient) operation or market leading brands. Products appeal to a wide range of customers Products are widely available through a range of markets Mass media is used to advertise the product Exa...