Market Environment

Definition: elements outside the business that the business has very little control over.

Includes:

·      10 factors

·      Porter’s 5 Model

1.     Suppliers- selling the product or delivering a service to the business

2.     Consumer- potential buyers of the product

3.     Competitors- business that sells the same or similar product

4.     Strategic alliance- the merging of two businesses so that they may expand the target market

5.     Intermediaries-bridge between the business and the consumer

6.     Non-Government Organizations (NGOs)/Non-profit Organizations- organizations that help with environmental, social and educational issues.

7.     Industry regulators: controls actions of the business so that the consumers aren’t exploited.

8.     Community Based Organizations (CBOs)- providing local services for the community.

9.     Trade Unions and Employer Organizations- protects the interest of the employees

10. Other Organizations- organizations that have unique and different roles to fill up the market environment.

Porter’s 5 Models:

1.     The level of rivalry in the market- aim is to gain an advantage over competitors.

2.     The availability of substitute products- to see what’s better or different between similar products.

3.     The treat of new entrants to the market- threat of future competitors.

4.     The power of supplier- Finding dominance between business and supplier.

5.     The power of the buyer- finding how much control the buyer has.