Changes In Business Objectives As They Evolve Flashcards
What must businesses take into account regarding market conditions?
The level of competition in the market
Understanding market competition is crucial for strategic planning and positioning.
What can happen when some competitors leave the market?
It may create opportunities for growth for other established businesses
This can lead to increased market share for remaining businesses.
How can a lack of competition benefit a business?
It can help maintain and develop customer loyalty and allow for higher prices
This might lead to the business becoming dominant in its market.
What impact does a recession have on business?
It leads to less demand, impacting revenues and profit
During a recession, consumers typically reduce spending.
What happens to businesses when the economy is growing?
They look to increase sales and invest in expansion
Growth periods often encourage businesses to take risks and innovate.
How does rapid technological change create opportunities for businesses?
It opens new avenues like e-commerce and larger market access
E-commerce allows businesses to reach customers globally.
What is e-commerce?
The buying and selling of products and services using devices connected to an electronic network, such as the internet
E-commerce has revolutionized retail and service industries.
What improvements have been made in production processes due to technology?
They have become quicker and easier, lowering costs
Efficiency gains can significantly enhance profitability.
What threat does technology pose to businesses?
Competitors can grow rapidly and invest heavily
Large companies can leverage technology to dominate markets.
How can heavy investment from competitors affect other businesses?
It can destroy other businesses in the market
Market dynamics can shift drastically with the entry of large players.
What must businesses do in response to changes in legislation?
They must change their aims and objectives accordingly
Compliance with laws is essential for operational sustainability.
What does the degree of impact from legislation depend on?
The nature of the business
Different industries face varied regulatory environments.
What might poor business performance lead to?
A reconsideration of its portion in the market
Businesses may exit the market if performance does not improve.
What do businesses that remain in a struggling market need to invest in?
Resources to increase sales
This may include marketing, staffing, or technology.
How can increasing size benefit a business?
It should reduce unit costs through economies of scale
Higher profit margins per sold unit can result from this.
What are internal reasons that might cause a business to change its objectives?
Change in ownership or senior management
Leadership changes often bring new visions and strategies.
Fill in the blank: A lack of competition can allow a business to charge _______.
higher prices
This can enhance profitability in less competitive markets.
