Speaker 1: This is another video for NXL GCSE Business Studies Topic 1.1 Spotting a Business Opportunity Analyzing Competitor Strengths and Weaknesses. Again, as I talk quickly in this video, if there is anything that you are unclear about, pause the video, do a bit more research online. These videos are not going to get you through an exam on its own, they are just an aid to help you with your revision. So, with that in mind, let�s have a think about competitor strengths and weaknesses. This paragraph, I�m not 100% certain where I got this from so I really apologise if I�m infringing someone�s copyright. If you want to pause the video now and just have a quick read. Three words that I�ve bolded are Competitive Advantage, Differentiate and Unique Selling Points. These are really, really powerful words which you can use in your exam, particularly if you�re doing the Unit 3 or Unit 4 exam or Unit 5 exam and you�re looking to build three markers, six markers, eight markers and ten markers. Competitive Advantage, having an advantage over your competitors. Differentiate, make yourself different. Unique Selling Point, what separates your business, what makes it unique, the one thing that makes it unique. These are really, really good terms to be able to use and are important when talking about competition. Often when we talk about competition, people don�t think about the broad ways in which we can or businesses compete. Here we�ve got a list of a variety of different ways that organizations can compete. We�ll briefly run through these but we�ve got eight ways that a business could compete on this slide. We�ll start at the top at 12 o�clock. We�ve got product range. Organizations can say, well actually we�ve got one product, let�s try and make something that�s slightly different which might get some different customers and bring them away from our competitors. For example, a few years ago Nissan Qashqai came onto the market. It was one of the first crossover vehicles. Since then, all the other businesses have started to do the same. They�ve increased their product range. So most manufacturers now offer some sort of crossover vehicle, some sort of 4x4 type vehicle. Apple, very, very good, are offering a product range. They offer the very, very expensive iPhone 6S. They offer the iPhone 6 Plus, the iPhone 6. So they�ve got different products for different customers. The iPad, the iPad Mini, the iPad Air and so on and so forth. So this is product range. It�s about having a variety of different products which will meet different customer needs and that�s one way you can compete. Another way you can compete is on quality. Now quality doesn�t have to be about being the most expensive. It�s about getting value for money. It�s about the materials which have gone into making your product or the care that�s gone into making your product being of value. But we often associate quality with more expensive things because that�s when people tell us that things are quality. So for example, if you�re going to buy something, you might get some businesses that will try and tell you that it is the best quality. They will be telling you that it�s made from great materials, the effort and care that�s gone into it is great and it�s better than their competitors. That�s trying to compete on quality. Design how the product is made or what the product looks like, the finished article. The water bottle market, I could go into a shop tomorrow and I could try and buy a bottle of water. One will have a screw cap, one will have a sports cap. The design of that bottle is designed to attract competitors, to attract customers away from their competitors. So I walk in, I�m going to go to the gym, I pick the sports bottle cap because that�s the one that suits my needs and so that change in design has won that business an extra customer. Selling experience. So what is the experience like when you go into the shop? Now I know from speaking to lots of students that often you don�t have great experiences when you go into shops because the staff don�t necessarily see you as customers who�ve got an effective demand or the ability to buy the products that are there. So they don�t always treat you well. However, if you think about some of the shops, particularly in our local area, if we go to Leeds Trinity, then we�ve got the Apple store which has got some amazing stuff for you to try out and touch within the shop. I was in the O2 store yesterday and obviously they�ve all got their phones on display and to allow you to try the products before you purchase them. And these sort of selling experiences, do they treat you well? Some businesses will go out of their way to try and treat you well in order to attract you away from their competitors. A good example would be something like Clarks as well where they fit the shoes to you in a really good way and as a result they�re trying to get you away from their competitors. After sales service, how are you treated after you�ve been sold the product? Shoe offers 365 days to return the product if you don�t like it. Other stores offer 28 days, 35 days. If you know that the person that you�re buying from or the organisation that you�re buying from has great after sales service then you can buy with confidence and that�s one of the reasons that you may choose that business and you may come away and not purchase from their competitors because you feel bad that if something goes wrong then the company that you pick will look after you then. Brand image, how do you feel about the product or the organisation? Organisations will spend millions of pounds each year trying to advertise their products and they�ll use celebrities, endorsements, trying to encourage you to feel a particular way about a product. If they can do that then you may well choose their product over a competitors product. A good product that I can think of that�s got a great brand image is Oakley Sunglasses. They are provided to all type of sportsmen whether it�s runners, whether it�s cyclists. So anyone who�s vaguely interested in sports or athletics or cycling is likely to want to get Oakley because that�s the brand that the other sportsmen and women use and professional sportsmen and women and so it encourages people to say well actually that�s a sporty brand, I know they�re a sporty brand so I�ll purchase their expensive sunglasses as opposed to another brand that I�m not necessarily aware of. And suppliers, whether it�s a restaurant which tells you that they use locally reared sheep in the lamb that they�re going to serve you or whether it is another organisation which says that the raw materials which goes into their phone is of a higher quality than its competitors. We can tell our customers or businesses can tell their customers that the suppliers that they use are better than their rivals and therefore hopefully try and compete in that way. So they are just 8 of the ways that an organisation could try and compete. When we think about it though they could go head to head. At the moment the supermarkets, Sainsbury�s Brand Match, Tesco�s Price Promise, Adder�s Price Guarantee, these are 3 organisations that are trying to compete with each other, trying to win customers by saying we�re the cheapest or if there�s a problem we will give you a refund. So this is head to head competition, it happens quite a lot with the supermarkets and on this one they are competing head to head on price. Other organisations might compete head to head on quality or head to head on design. So there are different ways that you could compete but head to head is just competing with the same issue. Differentiate from your competition, so we could try and differentiate, try and make ourselves different. Sports Direct, it competes pretty much on price, it tries to be one of the cheapest sports providers, sportswear providers on the high streets. JD on the other hand isn�t competing with Sports Direct on price. JD is probably competing with Sports Direct quite a lot about brand image or potentially the suppliers that they use. They get exclusive trainers within JD which Sports Direct can�t stock. If we look at Primark, similar sort of picture. Primark is competing on price whereas an organisation like Next, customer service is better, the quality of the clothes are better than Primark and so that�s how they are competing with each other. Next doesn�t compete with Primark on price and Primark doesn�t compete with Next on quality. They both got their own unique selling points. Ok so hopefully that video was useful, do a bit more reading if there is anything that you�re not sure about. Thank you very much.