The nature of these variables evolves over time. In other words, yesterday's impact might be commonplace today and of little consequence to anyone. Furthermore, there are always new manifestations of these variables that appear as time passes. For example, in years past, door-to-door retailing may have once been a threat to traditional store retailing, whereas today mail-order retailing is the current concern, and door-to-door is scarcely paid any attention. Marketers need to think of these external factors in terms of being either threats or opportunities . A threat is any situation that has the potential to impact a company in a negative way . On the other hand, an opportunity is any situation that a company may capitalize on to their own benefit . One of the marketer's biggest jobs, then, is keeping a steady lookout for both threats and opportunities, so that appropriate responses can be made in a timely fashion. This section examines five broad areas of external influence that companies face, along with numerous examples of how these factors may exert their influence. As you read them, try to think of other examples.
The Competitive Environment The competitive environment is in a constant state of evolution. Nothing is static in business, and competitors appear in many new shapes and forms. But worse than not recognizing the changing face of the competition is not recognizing the competition at all. A sure sign of a soon-to-die business is one that declares it has no competition. The reality is that there is a fixed amount of money that consumers have to spend, and ALL businesses are in essence competing for these finite dollars. To be short-sighted here is to hasten the demise of the business. Another common problem is the new business entity who thinks it will simply enter a market and command a sizeable, if not dominant, market share. This is seldom the case. The grim reality of business is that markets do not get larger just because new firms with new products arrive on the scene. There are only two situations under which a market may grow: there has been a structural change in the demand curve, or, the market has gotten larger on its own accord. In other words, all things constant, the new entrant must literally steal all of its business away from others. But will the other previously-established businesses let this happen? Over their dead body! Marketers must be cognizant of three forms of competition: 1. Intratype competition, which betweens within type competition (e.g., supermarket vs. supermarket). 2. Intertype competition, which means between type competition (e.g., supermarket vs. convenience store). 3. Emerging-type competition, which refers to the steady evolution of of markets and the introduction of entirely new business formats or types not previously encountered. "Category killers" are a good example: a narrow product line stocked in great depth and variety, often at discount prices.
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