Markets

Markets

1. Dynamic Markets

   • Constantly changing
   • Buyers may choose to buy less of one product and more of another
     • Due to rising incomes, fashions, fads or arrival of a superior competing product
   • Sales either rise or fall

2. All businesses must adapt to the changing nature of the market

   • New businesses emerge when technology makes it possible to invent new products or cheaper substitute
   • Sellers respond to buyers' changing needs by improving new products or introducing new ones
   • Sellers also respond to other sellers changes to stay competitive
   • Some businesses expand by diversifying

3. Online Retailing

   • During 2015 it increased by 18% in the UK
   • Some products become cheaper because distribution channels decrease
   • Profit is increased due to cutting costs
   • The digital economy includes all those areas of the economy that are affected by the development of computer hardware & software, ICT networks and online marketing

4. How markets change

   • Changes in supply and demand force markets to change
     • Need to find new ways to attract customers
   • Everyone wants best value for money
   • FACTORS
     • Needs and trends change over time
     • New technologies lead to improved products
     • Government involvment
     • Competition

5. Adapting to change

   • May have to cut prices or improve quality
   • Diversity into different markets

6. Competition affecting the market

   • Lower prices
   • Better quality
   • More choice
   • Innovation
   • Greater effciency

7. Risk vs Uncertainty

   • RISK
     • situations where the outcomes are known
     • Quantified by calculating probabilities
     • Can be reduced
   • UNCERTAINTY
     • when events are unpredictable
     • Factors outside the control
     • events which we have no information