Satisfying All Stakeholders in a Mature Competition - Essay Example

?Satisfying All Stakeholders When the Business Is Competing In Mature Product Markets Is Difficult In any business or firm, the stakeholders are people, groups, organisations or the members that are closely affected by its operations. Therefore, the stakeholders are adversely affected when a business is in losses. However, the stakeholders enjoy more when a business is a success, especially when it is recording inclining profits (Berends, 2004:12). Therefore, the stakeholders of a firm will ensure a firm is making profits. In making this achievement, they will bank on the management which is concerned with the business operations of the firm. Therefore, the management should ensure that the business is making profits all through the year. This is not an easy task especially when a firm is in the mature competition stage. In this stage, all the competitors have established markets. They are all struggling to get an extra market to expand their operational sphere (Neale and Haslam, 1994:120). Since the stakeholders have entrusted the management to deal with the business, they will only require satisfactory results. As such, most of the managers have to develop strategies that will improve on the overall business performance. In many developed countries, many businesses have been in the market for a long time. Therefore, they have firmly established their business links. This leaves a mature competitive market. In such a market, most of the industries fight for a low margin that is not aligned to a certain product. Therefore, they have to be convincing enough to attract such a market. For example, close to 80 percent of the industries in the United States are already in the mature market bracket. Therefore, they have to compete in ensuring they develop a wider market niche. This could be rather indulging as all of them are utilising varying strategies. Impressing stakeholders in a mature competitive environment is a hard task especially when the demand for the product is saturated. This is as a result of too much supply from a large number of manufacturers and industries, thereby making the market saturated. As such, the demand for the products only increases in negligible proportions. In some situations, the demand for products in this market slowly declines, which reflects a similar record in the sales of individual companies. In such an instance, the industry or firm should look for ways of attracting customers from the saturated market, who are already allied to specific products. Therefore, they have to practically convince the market to start using their products and abandon the others from the competitors. This is harder as compared to approaching a new market that does not have any experience in using product of such nature. A mature market has industries and firms that have a considerable financial muscle. Therefore, investing in emergent technologies can add huge value to managing the value chain. As such, companies invest in modern technologies which are used to improve on efficiency in production. Since their production is in large scale, they accrue the benefits of economies of large scale production (Haslam, Neale and Johal, 2000:67). In such a situation, the market is flooded with goods from different industries and firms, which is uncontrollable in liberalised markets. Practically, these businesses reduce overheads in relation to transport, labour and manufacturing when producing and supplying the products in the market on large scale basis. This could lead to high discount rates to consumers thereby reducing the prices of commodities across the entire supply chain. This could drive some other industries out of the market as the pricing drop could render theirs uncompetitive. Since time immemorial, there has been no generation of specific solutions or formulas that could be used by businesses in a mature competition. As a fact, they have to generate different strategies in ensuring they have a niche market (Ferrell and Hartline, 2010:541). Therefore, this makes it hard for the management to deliver results and satisfy all stakeholders. The management, therefore, indulges in trial and error methods in ensuring that the performance of the business is stable. Some trial methods could be detrimental to a business entity as they could be unsuitable for particular models already adopted within the business operations. For instance, they could try a method that is not attractive to the market, yet it is labour intensive. As such, the stakeholders are not satisfied with the results. When there is the introduction of new products in a mature market, all the industries are affected. Since the demand market is saturated, the new products could be detrimental to other industries. As such, some industries could encounter this by production of other new products. However, some of these decisions are made prematurely. For instance, a product design takes a long time before its initial introduction to the market. This includes all the process, tests and prototyping before introduction ((Neale and Haslam, 1994:122). However, some firms are forced to offer a product to the market prematurely. This is a move to encounter the introduction of new products, aimed at making an impact in the sales margin of the industry. However, this may prove to be a hard task as most of the products may not be appealing to the market. This makes it a hard task to satisfy the stakeholders. A competitive market holds various competitors that have been in the business for a long time. Such competitors are creative enough to generate different ways of attracting customers. Therefore, it is a hard task for a mature market to keep making creative ways of attracting the market. For instance, some industries use promotions and giving prizes to their consumers. If this is not initiated in a timely manner, it could lead to dismal results which are not impressive to stakeholders. For instance, when an industry holds a promotion for some of its products, it is hard for competitors to hold the same promotion. Therefore, the sales volumes in the market are directed towards the industry that is creating an impressive sale in the market. The world is experiencing change both in technology, climate and environment. These are aspects that are changing the tastes and preferences in the market. As such, the manufacturers and business have to be vigilant on the ever changing tastes and preferences in the market. For instance, the market’s cloth-line has been changing over time. As such, people are changing their preferences when the fashion changes. The same scenario happens to all other businesses as they have to create change in their products (Weinstein, 2004:123). This could be a hard task especially when there is need for a research in the market. The research is the initial stage that could be used to create tastes and preferences that could attract the market. However, when the research and change of the product delays, the industry or firm could be on the receiving end as most of their products will not be in demand. Inflation and change in the interest rates is a factor that affects the whole economy. However, these two aspects are controlled by many other aspects in the economy, which makes it a commitment to make them stable. However, when they increase, industries and firms are affected. When the interest rate and inflation increase the production and manufacturing expenses escalate. Similarly, all other expenses in the firm are increased. Therefore, the firm spends more in production of the same amount of goods. As such, their profit levels are jeopardised with such moves. In shaping up their profits, they have to increase on the pricing of their products (Berends, 2004:37). Since this is an internal factor, they could as well increase the price of the products. However, external forces like competitors make such industries to maintain their pricing. This makes it hard to increase their profit levels. As such, the stakeholders could run into losses, which is not satisfactory. Selling and attracting prospects and customers in the market is a conglomeration of activities which should be done by a firm. Therefore, appropriate linkage of these activities ensures the firm is selling products appropriately. However, in some instance, these activities may tend to be expensive. For instance, advertisement expenses and an increase in employee wage could create an increase in the expenses of a firm. Therefore, the management may not be in a position of increasing its input into the business when such expenses are escalating. Similarly, some investments take long before the results are achieved. For instance, when a firm has invested in a new product, it may take a long time before the proceeds are achieved. This could also reflect a decrease on the profitability of a firm as most of the new products in a market make losses on the initial introduction. In many countries, the government and relevant bodies control businesses and their operations. The products have to be manufactured and sold within a structured regulatory framework. Therefore, a business has to create the initiative in ensuring the products are sold and distributed in the market as required. For example, some governing bodies have stipulated the desired packaging of each product. The products should, therefore, be distributed in the market while adhering to the best of safe standards. This also includes the quality of products, labelling, distribution, health status and the manner in which they are advertised. These directives could jeopardise the profitability as they are labour intensive, and thus expensive in both short and long term. As such, the business cannot be in a position to realise the desired profits or sales levels. Similarly, the governing bodies impose bans on advertising particular products in particular ways, which reduces the consumer awareness of that product in a market. In conclusion, impressing stakeholders is an indulging process that demands steadfast commitment. However, some instances are not controllable and could inexorably lead to unimpressive results. References Berends, W.R. (2004) Price and profit: the essential guide to product and service pricing and profit forecasting, London,William R. Berends. Ferrell, O.C. & Hartline M.D. (2010) Marketing strategy, New York, Cengage Learning. Haslam, C. Neale, A. & Johal, S. (2000) Economics in a business context, London, Business Press. Neale, A. & Haslam, C. (1994) economics in a business context, London, Chapman and Hall. Weinstein, A. (2004) Handbook of market segmentation: strategic targeting for business and technology firms, New York, Routledge. Read More