Dynamic markets

• what is a dynamic market?

  a market that is subject to rapid change
• what is innovation?

  putting new ideas or designs into action
• what is product innovation?

  the creation and development of new or improved products or services
• what is process innovation?

  the implementation of new methods, techniques or practices that improve the efficiency, effectiveness and productivity of business operations
• what is a stable market?

  a market that changes very little
• what happens in a stable market?

  • innovation is rare
  • little variation in pricing or marketing
  • size of market and market share tend to be constant
  • the external environment is also stable (things like target market)
• why does a market change?

  • technological advancements
  • consumer behaviour and preferences
  • intensity of rivalry
  • external business environment (PESTLE)
  • change in market size
• what are technological advancements?

  when technology improves and changes the way a business runs
• what is consumer behaviour and their preferences?

  when the adapt a new want or need and the business has to change with them
• what is intensity of rivalry?

  if competition gets harder to overcome a business needs to adapt to gain a new competitive edge
• what is external business environment?

  if laws or environment, etc. changes the business needs to adapt
• what is change in market size?

  if new customers or competitors join the market you have to be competitive and gain the new cutomers
• what can change create?

  opportunities and threats
• how are dynamic businesses successful?

  • carry out market research often
  • encourage intrapreneurship (innovation)
  • make quick decisions
  • have flexible workforces
  • make continuous improvements
• advantages of product innovation?

  • be competitive
  • higher profits from premium pricing
• disadvantages of product innovation

  • may imitate a product from another business
  • research and development costs
• advantages of of process innovation

  • cost minimisation
  • improved products/service quality
• disadvantages of process innovation

  • upfront investments
  • takes time to generate profit
  • disrupts operations at first