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Using the data in Table 1, explain one way in which competition affects STC - AQA - GCSE Business - Question 3 - 2021 - Paper 1
Question 3
Using the data in Table 1, explain one way in which competition affects STC. (4 marks)
Worked Solution & Example Answer:Using the data in Table 1, explain one way in which competition affects STC - AQA - GCSE Business - Question 3 - 2021 - Paper 1
Step 1
Competition affecting pricing strategy
Answer
Competition in the clothing industry forces STC to adjust its pricing strategy in order to remain competitive. With a number of direct competitors as shown in Table 1, STC might reduce prices to attract more customers. The data indicates that STC's average price per item is affected by the presence of 12 competitors. Lowering prices can lead to increased sales volume, but could also reduce profit margins if not balanced effectively.