Knowledge is a fundamental phenomenon for tackling competition and still managing the marketing forces. It is used to come up with strategies for overcoming threats and weaknesses and also coming up with strategies for strengthening the opportunities. A strong knowledge base of the competitors and the business environment, together with the dynamic consumer preferences will enable one to get high profitability, hence, success in the business. Controlling new entrants and blocking them from entering the market will still lead to profits. When cash flows in and out of the organization are well managed, is the strength to the company, and they will experience high profits, (Stahl & Dean, 1999).
Market forces (Microenvironment)
For every product especially new, the product development cycle usually begins with the generation of the idea. This is done through thinking creatively to come up with a huge range of ideas regarding the product. The process needs to be ongoing and there is the need to put into consideration the viewpoints and ideas of many people so that the most appropriate idea is arrived at. SWOT analysis needs to be conducted to ensure the product that will be settled for is marketable. This refers to the overall gains and profits that will be accrued from the business venture. An unattractive business has low gains and hence, the forces of marketing often lead to the profitability and overall performance of the business going down. Hence, the business’ profits are on the lower side. The market forces, three give due attention and reference to external forces while the other two are concerned with the internal forces of the business, (Stahl & Dean, 1999).
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They are composed of the forces to a company that affects its capability to earn gains or profits. If a company wants to change any of these forces, a market assessment and research need to be done afresh to give in new information about the industry and the business/market environment. If a business is attractive it does not mean that it will have 100% profitability, it means that it needs to put into consideration their key, competencies, their business canvas and model as well as strengthen their network to achieve higher profitability. The horizontal competition forces include; the threat from other substitute products and/or services, the threat from already established competitors, and the possibility of threats emanating from new entrants into the market. Conversely, vertical competition is made of the bargaining capability of the consumers and the suppliers (Stahl & Dean 1999).
Market Force 1: Threat of new entrants
When new competitors enter the market, it increases the competition and further leads to losses as the customers are shared among the competitors. They should be barred from entering into the market by having stiff penalties and policies to deter them from joining the market the raw materials may also be sold to them at very high prices so that they are unable to purchase them. Once they exit the market, this will enable the business opportunities to thrive and profits to increase. The government may also create barriers through monopolies to discourage competition, (Stahl & Dean, 1999).
Market Force 2: Threat of substitute products or services
Substitute products are those products that are similar but from other rival industries. The elasticity of the prices, profitability and demand/supply are affected. This is if the prices of the substitute product are lower, they will be favored, hence, the customers will boycott buying the higher-priced product and/or service, (Stahl & Dean, 1999).
Market Force 3: Bargaining power of customers (buyers) and suppliers
The purchasing power of the consumers determines the price and subsequently the demand, supply, competition of the commodity. They will nurture a strong relationship with the seller if they have a higher purchasing and bargaining power, which will ensure that the seller, will always get market for their commodity.
The suppliers of raw materials, on the other hand, ensure that the seller has labor, capital, and other supplies that are required to create the products for the company to run on maximum profits. If they offer competitive prices they will enable the seller to get maximum profits as well as the buyer getting a good price for the commodity.
Strategies to Overcome the Threats
The threats in the marketplace are those factors that can interfere or inhibit one from achieving and marketing one’s goals. They come in different forms, including the entrance of new competitors or low-cost competitors, new products with better performance records, sluggish market growth, and barriers entrants into the market, dynamic customer preferences or dynamics that increase the cost or make it difficult to adhere to the codes of regulation of the business. Technological issues may also be threats in the business environment. One can be able to check on the threats via social media and the internet, email alerts can also be activated to inform the company on high and low competition levels. One may charge lower costs for the product/service so that they have a competitive advantage over their competitors (Crum & Goldberg, 1998).
One may also source products of lower prices from the suppliers and manufacturers. Improving the product and incorporate other new ideas to make it unique from the other competitors’ products or services. Decreasing the ability of competitors to enter into the market by coming up with partnerships with suppliers for raw materials to put off the competitors and block them from engaging in a similar business.
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Strategies to Capitalize on the Opportunities
There is the need to capitalize on the capital of the company; this is because financial capital has been forgotten as a spiraling catalyst. Human capital is the key catalyst to productivity and high profits. It is a flexible and most priced asset and resource for the organization, as it controls all the other assets and liabilities that the organization possesses, (Orcullo, 2008).
Partnerships and collaborations need to be distinguished and engaged in so that innovations may be made possible. This will ensure that the human resource is used well and will enable the workers to utilize all the upcoming opportunities that arise from the endeavors. They enable companies to think outside the box, source funds, and generate better ideas; technological innovations spur the company to greater heights (Orcullo, 2008).
By practicing transformational leadership helps capitalize on the opportunities and decrease the weaknesses and threats by decreasing the external negative force. Conflicts are resolved soundly and hence, the business environment is made comfortable, conducive, and cozy for the thriving of profits. It also encourages critical and creative thinking as well as rationality in decision making which will spur the company to greater heights and capitalizes on the opportunities (Orcullo, 2008).
Knowledge is a fundamental phenomenon for tackling competition and still managing the marketing forces. It is used to come up with strategies for overcoming threats and weaknesses and also coming up with strategies for strengthening the opportunities. A strong knowledge base of the competitors and the business environment, together with the dynamic consumer preferences will enable one to get high profitability, hence, success in the business. Controlling new entrants and blocking them from entering the market will still lead to profits. When the suppliers co-operate in the pricing mechanisms high profits are realized.