PART 4

Question 1

STEPS TO EVALUATE AND ASSESS MARKET POTENTIAL THROUGH MARKET RESEARCH (5-VAACE)

Answer 1

Verifying Market Size
Analyzing Market Growth Trends
Assessing Competition
Consumer Behaviour and Preferences
Evaluating Profitability

Question 2

involves looking at both the number of potential customers (volume) and their overall spending power (value)

Answer 2

Verifying Market Size

Question 3

this basic information is crucial for a more in-depth analysis of the market

Answer 3

Verifying Market Size

Question 4

look at how the market is growing

Answer 4

Analyzing Market Growth Trends

Question 5

examine past trends, current conditions, and future predictions

Answer 5

Analyzing Market Growth Trends

Question 6

Key Factors to Consider- Analyzing Market Growth Trends

Answer 6

how saturated the market is
its potential for growth
any new sectors that are emerging

Question 7

involves analysing the strengths and weaknesses of competitors, their market positions, and any barriers that might prevent new businesses from entering the market

Answer 7

Assessing Competition

Question 8

Knowing what customers want and how they behave is crucial. This step involves dividing the target market into segments and understanding their buying habits, preferences, and needs. Tools like surveys, focus groups, and consumer data analysis are often used here.

Answer 8

Consumer Behaviour and Preferences

Question 9

The final step is to assess whether actually entering the market would be profitable, so weighing the costs of entering the market against the potential earnings. Financial modelling and forecasting are used to estimate potential revenue and profits.

Answer 9

Evaluating Profitability

Question 10

HOW TO CONDUCT A MARKET POTENTIAL ANALYSIS (5-CAEAE)

Answer 10

Conducting Customer Research
Analyzing Market Trends
Evaluating Competitive Landscape
Assessing Market Size and Growth Rate
Estimating Profit Potential

Question 11

involves understanding the needs, preferences, and behaviors of your target customers. This can include collecting data through surveys, interviews, focus groups, and even social media engagement. This crucial step allows you to tailor your product or service to meet the demands of your customer base, enhancing customer satisfaction and loyalty.

Answer 11

Conducting Customer Research

Question 12

is key to assessing market potential. You need to keep an eye on the latest developments in your industry, including new products, technologies, regulatory changes, and consumer behavior. This insight can inform your product development and marketing strategies, ensuring you stay competitive and relevant in your market.

Answer 12

Analyzing Market Trends

Question 13

involves identifying your direct and indirect competitors and analyzing their products, marketing strategies, market share, strengths, and weaknesses. This knowledge allows you to differentiate your product, identify gaps in the market, and devise strategies to gain a competitive edge.

Answer 13

Evaluating Competitive Landscape

Question 14

involves quantifying the number of potential customers and the rate at which the market is expanding or contracting. This information is vital for understanding the potential demand for your product and the scalability of your business.

Answer 14

Assessing Market Size and Growth Rate

Question 15

involves analyzing the potential revenue and costs associated with your product or service. This includes considering the pricing strategy, cost of production, operating costs, and potential return on investment. This step is crucial for determining the financial viability of your product or service in the market.

Answer 15

Estimating Profit Potential

Question 16

ENTRY BARRIERS

Answer 16

obstacles that make it challenging for new competitors to enter a market

Question 17

BARRIERS TO ENTRY
an advantage of established sellers in an industry over potential entrant sellers, which is reflected in the extent to which established sellers can persistently raise their prices above competitive levels without attracting new entrants to enter the industry

Answer 17

(Joe S. Bain, American Economist)

Question 18

BARRIERS TO ENTRY a cost of producing that must be borne by a firm which seeks to enter an industry but is not borne by firms already in the industry

Answer 18

(George J. Stigler, another American Economist)

Question 19

Zero barriers to entry

Answer 19

Perfect competition

Question 20

Medium barriers to entry

Answer 20

Monopolistic competition

Question 21

High barriers to entry

Answer 21

Oligopoly

Question 22

Very high to absolute barriers to entry

Answer 22

Monopoly

Question 23

ETHICAL CONSIDERATIONS IN INTERNATIONAL BUSINESS (10-CLECHFSFTR-Cats Love Eating Cheese; Hamsters Find Socks For Their Resting)

Answer 23

1. Cultural Sensitivity
2. Labor Practices
3. Environmental Impact
4. Corruption and Bribery
5. Human Rights
6. Fair Trade
7. Supply Chain Responsibility
8. Fair Competition
9. Transparency and Accountability
10. Respecting Intellectual Property

Question 24

Respecting diverse cultures is essential. Practices that may be acceptable in one culture may be considered unethical in another. Understanding and adapting to cultural nuances are vital.

Answer 24

Cultural Sensitivity

Question 25

Ensuring fair wages, safe working conditions, and respecting workers’ rights are fundamental ethical obligations. Companies should avoid exploiting cheap labor or engaging in child labor.

Answer 25

Labor Practices

Question 26

Companies must consider the environmental consequences of their operations. Responsible resource management, waste disposal, and efforts to minimize ecological footprints are ethical considerations.

Answer 26

Environmental Impact

Question 27

Operating ethically means avoiding corrupt practices and bribery. Businesses should adhere to anti-corruption laws and international standards, such as the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act.

Answer 27

Corruption and Bribery

Question 28

Companies should uphold human rights standards in their operations and supply chains. This includes avoiding involvement in human trafficking, supporting fair treatment, and respecting the rights of local communities.

Answer 28

Human Rights

Question 29

Encouraging fair trade practices involves ensuring fair compensation for producers, promoting sustainable agriculture, and avoiding exploitative trade relationships.

Answer 29

Fair Trade

Question 30

Ethical businesses consider the entire supply chain, ensuring suppliers adhere to ethical standards. This includes verifying that suppliers do not engage in child labor, have safe working conditions, and adhere to environmental regulations.

Answer 30

Supply Chain Responsibility

Question 31

Companies should compete fairly in the global marketplace, avoiding practices that undermine competition or engage in monopolistic behavior

Answer 31

Fair Competition

Question 32

Maintaining transparency in business operations and being accountable for actions is essential. This involves honest communication with stakeholders, including customers, employees, and the public.

Answer 32

Transparency and Accountability

Question 33

Companies must respect intellectual property rights, both domestically and internationally, to foster innovation and fair competition.

Answer 33

Respecting Intellectual Property