Market forces

Question 1

Evaluate the impact of market forces on a business and its stakeholders

Answer 1

Competition: Competition is one of the most significant market forces that can impact a business. Increased competition can lead to lower prices and higher quality products, benefiting consumers

Economic conditions: Economic conditions, such as inflation, recession, and unemployment, can also impact a business and its stakeholders.

Supply and demand: The balance between supply and demand is another important market force that can impact a business. If there is an excess of supply and not enough demand, prices may fall, leading to lower profits for businesses.

Government regulations: Government regulations can also impact a business and its stakeholders. For example, stricter environmental regulations can increase the cost of production for businesses

Question 2

Justify how a business should respond to market forces

Answer 2

Adapt to changes in consumer behavior
Innovate
Monitor competition
Manage costs
Diversify

Question 3

Evaluate the extent to which a business is affected by the dynamic nature of the market

Answer 3

Changes in consumer behaviour
Economic conditions
Competition: Competition
Supply and demand
Government regulations

Question 4

Evaluate the impact of Competition at the Local, National and Global contexts on a business.

Answer 4

Local Competition: Local competition refers to businesses that operate in the same geographic area as the business in question. This type of competition can impact a business in a number of ways, such as affecting its market share, pricing, and marketing strategies.

National Competition: National competition refers to businesses that operate in the same country as the business in question. This type of competition can impact a business by affecting its market share, pricing, and marketing strategies on a larger scale.

Global Competition: Global competition refers to businesses that operate in different countries and continents. This type of competition can have a significant impact on a business, especially if the business operates in a global market