Topic 3 Market Environment

Question 1

Defining the market environment

Answer 1

Immediate external component that directly affects the business to cooperate.

Question 2

Components of the market environment

Answer 2

1. Customers / consumers
2. Suppliers
3. Intermediaries
4. Competitors
5. Other organisations /Civil society

Question 3

Consumers / Customers / market

Answer 3

Refers to individuals and other businesses that purchase products and services from a business.
Consumers are final users of the product.
If customer not happy they turn to competitors

Question 4

Suppliers

Answer 4

Business needs to ensure that they identify reliable suppliers in the market.
Business can establish a good relationship with their suppliers by signing long term contracts for raw materials at fixed prices

Question 5

Intermediaries

Answer 5

Bride gap between producers and consumers.
Individuals or businesses that distribute and sell the products/ services of a business

Question 6

Competitors

Answer 6

Businesses or organisations that provide or sell more or less the same goods and services.
New entrants to the market
Power of consumers
Competitive rivalry