Market Environment Flashcards
Characteristics
Refers to challenges and influences from immediately outside of a business
Also known as operational environment
Can’t be controlled, only influenced to a certain extent
Components
The market Suppliers Intermediaries Competitors Other organizations Opportunities and threats
THE MARKET
Refers to consumers who buy goods and services a business has to offer
Consumers can be private persons or other businesses
SUPPLIERS
Provides the resources needed by a business to produce goods and services
Suppliers can be business or individuals
Competition is tough between suppliers
INTERMEDIARIES
Also known as agents
Act on behalf of a business to bring goods and services to consumers
Can earn commission on the goods they sell
COMPETITORS
Businesses that offer the same or similar goods and services to consumers
Compete for the same market
Businesses must focus on their own strengths to beat competitors
Advantages of competitors
A greater variety of Goods and services
Lower prices
Improves quality of goods and services
Better marketing
OPPORTUNITIES AND THREATS
Arise from outside of a business
Cant be controlled
What are opportunities
A trend that has a positive effect on a business
What are threats
A trend that has a negative effect on a business
Opportunities and threats can arise from:
Change in legislation or new legislation
Competitors entering or exiting a market
A gap that suddenly appears in the market
Who controls the market environment
Consumers
Competitors
