07 Explain how the arrival of a new competitor might force an established business to change its objective to survival.

[Sir Afzal Shad]

07 Explain how the arrival of a new competitor might force an established business to change its objective to survival. [3]

[Shaliza khawaja]

arrival of new competitor can cause them to lose customers and hence decrease sales and profit
for example if a might grocery store open, the small store will lose its customers
this new cmpetitor would make theme focus on survival or cost cutting as they have no finance to reinvest in the business and compete with the large store, in the long run if this continues the store would be forced to take a loan to expand or permanently shut down

[shamaim shakeel]

Knowledge Point:
The arrival of a new competitor can force an established business to focus on survival because the new rival can take away customers and reduce the business’s revenue.

Application:
For example, if a new fastfood outlet opens near KFC, it might offer cheaper meals or new flavours that attract KFCs regular customers.

Analysis:
Losing customers will lower KFCs sales, making it harder to cover running costs like rent and wages. This may push the business to change its goal from growth to survival so it can stay open. To achieve this, it might focus on keeping loyal customers through discounts or better service until the market becomes stable again.

[Subhan Zafar]

{KN}Customers may be attracted to the new competitor’s lower prices, promotions, or innovative products, leading to a decline in the existing firm’s sales.
{APP}For example, if a local mobile network in Pakistan such as Ufone faces a new competitor like Zong offering lower call rates, internet bundles, and attractive promotions, many customers might switch to the new provider. This would cause a decline in Ufone’s sales and revenue, reducing its profitability and market share.
{AN}As a result, Ufone may be forced to change its main objective from growth to survival, focusing on retaining existing customers, reducing costs, and maintaining enough income to stay operational. Once the competitive pressure eases, the business could then return to long-term goals like expanding its network or improving profitability.

[Fatima ibtehaj]

[KN]When a new competitor enters the market, it can take away customers from an established business by offering lower prices, better quality, or more innovative products.
[APP]If a new fast-food chain opens near an existing one and offers cheaper meals, the older business might lower prices or cut costs simply to survive in the market.
[AN]By changing its objective to survival, the established business can focus on short-term stability which can help the business stay afloat during tough competition, giving it time to recover, rebuild customer loyalty, and plan future growth once the market stabilizes.

[Abdullah Baig]

Kn
A new competitor can reduce a business’s sales and profits, forcing it to focus on survival
App
For example, if a new pizza shop opens near an established one customers might switch to try the new business causing the old shop’s revenue to fall so it shifts its focus to cutting costs and retaining loyal customers
An
Therefore, increased competition can make survival the main priority until the business regains its market position

[M huzaifa jillani]

(KN)
When a new competitor enters the market it can take away customers and reduce the sales of existing businesses.
(APP)
For example if a local clothing store in rawalpindi faces competition from a new international brand like "H and M" its sales might fall sharply as customers switch to the new store.
(AN)
As a result the established business may need to focus on survival instead of profit or growth by cutting cost,lowering prices or improving customer service to maintain enough revenue to stay open.

[Uqbah hadeed kayani]

[kn] A new competitor can take away customers, putting pressure on the existing business’s sales and profits.
[app] For example, if a new takeaway opens near an existing one, the original business may see a sharp fall in daily orders.
[an] This leads to lower revenue, which can reduce cash flow, force cost-cutting, and shift the focus from growth to simply staying open.

[areeshasaber]

[kn] the new competitor may take a few of your customers, forcing you to change your objective to survival.
[app] for instance, anew clothing manufacturer enters the markets with their innovative ideas and marketing stealing your customer base.
[an] this will lead to reduced sales, need to innovate and shift of focus from growth to survival.

[Arham Qadri]

[KN] As the new competitor can take some of the customers which will reduce sales forcing it to focus on survival.
[APP] For example if a new football shoe shop opens near an established/old one the customers might want to try the new shop which will reduce the sales of the old shop.
[AN] This means the established business may have to lower prices to stay competitive, spend more on marketing to retain customers, and change its objective from profit maximization to survival in the short term.

[sikander ali]

[KN] to keep the business running and keep regular sales .
[APP]for instance a book store having a new competitor selling cheaper and all kinds of books so the owner will chose survival as a objective to keep their business operations running .
[AN]thus this would help them reduce the other risk of losing loyal customers then giving discounts or using other pricing strategies also giving time to find a prominent solution for it.

[Shuraim Arif]

(KN) To save itself from losing a lot of market share, the business would change its objective to survival.
(APP) For example, Business A, an ice cream selling business may switch its objectives to survival after a new business, Business B, also an ice cream selling business, enters the market. This would happen because the new business may have started selling a flavor that Business A doesn't have and the flavor has become customers' favorite. Business A would temporarily switch to survival as its main objective while it figures out how it can make the same flavor or a better one.
(AN) This would give the business enough time to innovate a new flavor while not losing a lot of market share as competitive pricing method would still attract many customers. After the business successfully launches the new flavor, it would switch back to maximizing profits as it would have a huge competitive edge over the market in the form of USP.

[Wahaj Ashraf]

[KN] To save itself from losing market share as the competitor may bring something unique in the market.
[APP] e.g. Suppose it is a new drink business in the market thus the new business may offer new flavours which may attract customers thus in order to stay competitive the business may temporarily change its objective to survival.
[AN] Thus by this shift the business will get time to get dynamic e.g. bring in new flavours to be competitive thus allowing business to attract customers which will help them maximize their profits helping in competitive market.

[Abdullah Mohsin]

[KN] To help maintain the profits of the business.
[APP] For example, if an international coffee shop like Starbucks opens in a new country, local coffee shops may change their objective to survival, as Starbucks has a strong global brand and customer loyalty which could reduce their sales.
[AN] Focusing on survival helps these smaller businesses cut costs, improve service quality, and retain enough customers to stay in operation despite the rise in competition.

[EmmanWaseem]

They may have more attractive products
If the competitor does, the business has to switch to survival as the competitor products maybe more attractive and different and due to their usp
So they have to bring customers back towards them so they will find strategies to do so