Fiona Fashion, an apparel store, suddenly experiences a huge dip in its sales in a particular locality. This decline in sales is due to the fact that a new store has opened in the same locality, and it provides the same products and goods at lower prices. Which component of the specific environment has caused this decline in the customer base of Fiona Fashion?

Question

Business

Lilyana Alvarez

9 May, 22:16

Fiona Fashion, an apparel store, suddenly experiences a huge dip in its sales in a particular locality. This decline in sales is due to the fact that a new store has opened in the same locality, and it provides the same products and goods at lower prices. Which component of the specific environment has caused this decline in the customer base of Fiona Fashion?

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Answers (1)

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James Jackson · Answer 1

Competitor component

Explanation:

Business success in a free economy is dependent on competition in the market place. A new store opening in the locality with the same goods is a direct competitor to Fiona Fashion.

They have competitive edge of providing the same goods as Fiona Fashion at a lower price. So sales of Fiona Fashion will dip and the new store will get increased market share.