1.1.1 The Market - innovation & market growth + risk and uncertainty Flashcards
Markets over time can what?
Can grow
either rapidly or slowly
Market growth
An increase in the number of people who buy a particular product or service
Growth in existing markets and new markets can occur because of the following 5 reasons…
1) Economic growth
2) Innovation
3) Social changes
4) Changes in Legislation
5) Demographic changes
How can economic growth cause growth in existing/new markets?
Global living standards tend to rise over time meaning that the worlds population have more money to spend .
-Also as ppl get wealthier the want more luxury goods e.g Cars, Electronics, Air travel
How does innovation cause growth in new/existing markets?
Businesses can grow their markets through the process of innovation which creates new wants and needs.
E.g Apple creating new smartphones
How does social changes affect growth in new / existing markets
Social changes can have a big impact on markets
e.g decline in marriages, an increase in women and growth in one parent homes have increased the market size for childcare and housing
How does changes in legislation affect growth in new / existing markets
New laws can affect markets.
e.g a ban on tobacco advertising in the UK might have reduced the market size for cigarettes
How does demographic changes affect growth in new/existing markets.
Changes in the structure of the population can affect market sizes.
e.g increases in age for population means increase in specialist markets for the elderly e.g healthcare , care home , mobility aids
Risk
Business/individuals taking actions where the outcomes are unknown.
e.g investing money into the business not knowing if the investment will be successful
Uncertainty
unpredictable and uncontrollable events that affect businesses.
e.g external influences like competition
