Ext. Definitions - Market, Market Size And Growth Flashcards
Define competition
Rivalry amongst sellers
Define market
Where buyers and sellers are in contact in order to establish price
Define a physical and non-physical market
A physical market brings buyers and sellers together in the same location. A non-physical market is mostly electronic with customers using a variety of devices in order to buy the products.
Define market price
The price range in a market in which customers are willing and able to pay
Define mark up
Difference between the cost of producing an item and the price at which it is sold
Define competitive market
A market in which there are a large number of sellers, competition is mainly based on (usually low) price.
Define monopoly
A market dominated by one seller. In reality, it’s when a business has a 25% market share, usually high prices
Define economies of scale
When unit costs fall as output rises
Define oligopoly
A market is dominated by a few firms with similarly high prices (non-price differences), certain level of interdependence if one business changes prices the others will have to follow suit (could also force other businesses out the market)
Define monopolistic competition
When a market is dominated by many firms with fair prices
Define collusion
Illegal - when rival companies cooperate for their mutual benefit, when 2 or more parties act together to influence production and/or price levels.
Define non-price differences
Oligopoly uses non-price differences to compete effectively; these can include customer service, network coverage and add ons.
Define market size
The collective value of all the businesses in that market.
Define market growth
Percentage growth in the size of the market measured over a specific period
Define market share
Percentage of total sales that a business has in a specified market
Define barriers to entry and exit
The factors that could prevent a firm from entering and competing in a market/the factors that could prevent a firm from leaving a market, even if it wanted to
Define market dominance
A measure of market share compared to competitors
Define market power
The ability of a firm to influence or control the terms and conditions (eg.higher prices) on which goods are brought and sold.
Define acquisition/takeover
This is where control of another company is achieved by buying a majority of its shares (external growth)
Define merger
This is where two companies join together to form a new larger business (external growth)
Define external growth
Growing from outside the business
Define internal growth
Growing from within the business
Define diseconomies of scale
The business becomes too big to communicate properly
Define duplication of roles
A position is replicated within the business which usually ends in staff being made redundant
