Unit 7: Business Decision Making

A new business may see a gap in the market. This is where a consumer need is not being met by current products or services on the market. This may include creating a brand new product, making improvements to an existing product or selling an existing product in a new market. For example, Uber saw how difficult it was for people to hail taxis in some areas and created an app for people to order a car.

A new business may analyse potenital competitors to explore opportunities. This may present opportunities where there is a gap in the market or a successful product or service in a growing market which has potential for more businesses to enter. Analysing competitors also gives a start-up business a picture of the industry standards in terms of quality and pricing.

Current trends can indicate which products will be successful on the market. A new business may look at sales data for different products to see which products are popular or may look at lifestyle changes and make predictions on products that may suit these changes. For example, there has been a recent trend of people wanting to eat less meat which has led to many companies entering the market selling plant based alternatives.

Anticipating likely demand can be done through sales forecasting techniques such as extrapolating past and current sales data. Primary market research can be conducted to gather information on consumer preferences to predict future demand.

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