Marketing - Business Paper

 
Sample: Marketing - Business Paper
1
1. Question 1.
Business environment is one of the core notions used when discussing the creation,
development and sustainability of different businesses. In its most comprehensive sense,
business environment is a set of various factors that affect, either positively or negatively,
the operation of businesses. Naturally, businesses do not exist independently from the
business environment that surround them, and, thus, they should always take into
consideration environmental factors.
In general, there are two types of business environment that organizations have to
deal with: Internal environment and external environment. Internal environment is believed
to be controllable on the part of businesses, and it is comprised by inner organizational
policies, strategy, goals, hierarchy and management tactics and other interior functional
elements of any business unit. On the contrary, external factors are considered to be
predominantly out of control of businesses; instead, external environment itself produces
an enormous impact upon the way business units operate (Goyal 12). External business
environment includes the following factors: Political situation in the country, laws and
governmental policies; economic situation and trends, social and demographic realities,
technology, competition intensity at the market, and many others.
Businesses should, first of all, be aware of the specific features of their business
environment and, secondly, they should adapt to them via adjusting their goals, policies
and routine operations to the nature of their surrounding. Business environment is highly
important, because each business unit is a part of it and even more than that – each
company and organization is a product of business environment. Thus, one may conclude
that the combination of external factors may imply both threats and opportunities for
business, and companies can and should analyze the environment and determine the range
of favorable factors and the range of unfavorable ones.
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Environmental factors are interdependent, for example, the level of economic
development and governmental funding strongly affects technological development. Thus,
in terms of analyzing their environment businesses should develop a skill of prediction and
be capable of foreseeing what long-term and short-term effects any social, political,
technological or cultural shift will produce on business environment. It may happen that
certain businesses also affect the external environment, for example, by providing
employment opportunities and improving well-being of the people, or by changing their
perceptions and culture. Thus, businesses and business environment are tightly interrelated.
2. Question 2.
Market is the medium in which buyers and sellers are engaged into a series of
interactions, aiming at exchanging certain goods or services. Buyers and sellers are the two
main components of the market, they are interconnected and dependent on each other;
sellers produce and sell while buyers purchase and consume. In the highly hypothetic
conditions where one of these two basic components is missing, market ceases to exist.
Present day markets’ operation is based on the two core economic principles, namely
demand and supply. Demand is the amount of goods that buyers are willing and capable of
purchasing. Supply, in its turn, is the amount of goods that sellers are willing and capable
of producing.
Supply-demand correlation determines the level of market saturation with different
goods and services, price of goods and services and other important issues. In general,
demand is generated by buyers, as a total number of all people with the ability to purchase
goods and services. Supply is generated by sellers, as a sum total of all business units witch
are able to produce goods and offer services. The interaction of buyers and sellers
determines the price; a factor which is crucial for supply-demand relation.
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One of the most important laws of the market – the law of demand – states that price
is inversely proportional to demand, that is, when the price for some goods or services
increases, the demand for these goods and services goes down, and vice versa (with all else
equal) (Supply & Demand: How Markets Work). At the same time, the law of supply
claims that when the price for some goods or services grows, they are supplied in greater
quantity as an effect of that, and vice versa. Achievement of equilibrium, that is, when
demand and supply are well-balanced and harmonized, is the key to successful
development of the market.
Also, demand and supply are additionally affected by other factors. In particular,
buyers’ intention and ability to buy depends not only on the price of some goods of
services, but on the price of other similar goods and se