The changing competitive market/ impact of on business Flashcards
New entrants
When new entrants in the market increase competition, existing businesses have to consider their position.
ex. the growth in online shopping has forced many retailers to offer their own e-commerce services. Many retailers collapsed as they failed to compete online, meaning that survival is hard for them without online services.
New products
When a new product appears in the market, most firms are forced to make changes to theirs.
They might lower the price of existing products or invest in aggressive marketing campaign.
Consolidation
Means: the merger or acquisition of many smaller companies into one larger one
When consolidation occurs in markets, the number of businesses in the market falls but some of the existing businesses get bigger.
These bigger organisations may be more of a threat to others as they can lower their cost, charge lower prices and increase market share.
Other businesses might react by organising mergers and takeovers of their own.
