Business Study - IA1

Topic 1 - Competitive Markets

What is the Maturity Stage?

The maturity stage is when a business:

• When it has fully captured its target market

• Experiences slower and almost no growth

• Is well-established and has hit the peak of its market

What are challenges of the maturity stage in the business life cycle?

• Market saturation - When business has captured most of its target market → Customer growth slows = decrease in sales, growing competition.

• Slower Revenue Growth - Sales plateau or grow very slowly & businesses must shift focus from expansion to efficiency and profitability.

• Operating costs increase - Operational costs must be optimized to maintain profitability.

• Need for innovation - Essential to reignite growth or enter new markets. Without new products or services → business risks becoming outdated.

• Strategic Repositioning - Businesses need to diversify offerings, rebrand, or explore new customer segments due to customer demands changing and evolving.

Goals and Objectives of The Maturity Stage

• Avoiding a state of decline

• Increasing market share

• Entering a new market

• Acquiring new sales and new customers 

Describe Domestic, Global and Emerging Markets

Domestic: The supply of, and demand for, goods and services within a single country; also referred to as the internal market.

Global: The buying or selling of goods and services in all countries of the world.

Emerging: A market that is building accountability and strength, opening to new foreign investment and trade, and expected to provide higher returns despite greater risks.

Define Growth Strategy and Explain What Are The 2 Types?

Growth Strategy: specific strategy affecting either new or existing products/markets, designed to increase overall market share of a business

The 2 types:

1. Vertical Growth: Adaption of business product and services to increase sales revenue from the existing market.

2. Horizontal Growth : Replication or expansion of a business product, service or model into new markets or industries.

What is Risk Management and what are the 2 areas that must be considered?

Risk Management: A process to identify, evaluate and understand the risk of business actions and decisions in order to minimise, control or eliminate the impact of unacceptable risks

Two areas:

• probability of implications from the activity 

• actual consequences if something should go wrong

Explain the role of Risk management during expansion

Explain the role on an intrapreneur

In competitive environments Intrapreneurs:

• Innovate processes & systems and ways of working in the business

• Focus on the operations of the business

• Seeks new opportunities to improve efficiency and productivity for competitive advantage in the business

• Solves problems creatively to boost efficiency or customer satisfaction

• Drives change by challenging outdated systems or processes

• Supports competitive advantage by keeping the business fresh and forward-thinking

• Collaborate across teams to bring ideas to life

• Reduces risk of innovation by testing ideas internally before full-scale launch

employees

Individuals hired by an organization to perform specific tasks in exchange for payment. They contribute to the company's operations and success.

manager/owner

Individual responsible for overseeing operations, making decisions, and leading employees within a business or organization.

organisational culture

The values, beliefs, and behaviors that shape the unique social and psychological environment of an organization.

organisational structure

The framework that outlines roles and responsibilities of each member of the business. It establishes the hierarchy, roles, responsibilities, communication, and authority flow.

External operating factors

Suppliers

Interest groups

Competitors

Customers

role of suppliers

provide resources that a business needs to operate. Usually they offer timely and cost effective manner

interest groups

• organisations that have a common interest in protecting and promoting the business

• These include professional associations and unions

competitors

Competitors are business within an industry that offer similar products or services.

customers

Customers are essential for the success and growth of a company by providing revenue. promote a business through word-of-mouth and online reviews

List all 7 MACRO environmental factors (STEEPLE)

Social factors

Technological factors

Economic factors

Environmental factors

Political factors

Legal factors

Ethical factors

Describe a profit business and its main goal

• Serve their customers by selling a product or service.

• The business owner earns an income from the profit and may also pay shareholders and investors from the profits.

• Goal is to make money by selling goods or services to make a financial gain.