Changes in the Global Marketplace
The marketplace has changed significantly in recent decades.
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We have become used to one-stop-shop destinations such as huge shopping malls
containing shops, restaurants, theatres, banks, insurance companies, etc. There has also
been the development of large retail parks which are usually found in the suburbs and
contain supermarkets and stores selling “big ticket” items like appliances and furniture.
Malls and retail parks appeal to customers because they tend to have long shopping hours
and plenty of parking.
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Trading hours have been extended to seven days a week for most retail outlets.
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Many retailers have diversified their services. Furniture stores now sell financial services
and insurance, petrol stations sell groceries, general stores such as K-Mart and The
Warehouse sell everything from lollypops to home entertainment centres.
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Some “stores” are mere kiosks, and some are non-permanent pop-up stores with shortterm leases on retail premises.
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There is now an abundance of discount stores, such as The $2 Shop that sell a broad
range of cheaply made products such a stationery, party supplies and homewares. These
shops have brought welcome competition to consumers but are of concern to traditional
suppliers such as stationery shops.
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E-commerce has changed how many of us shop. We
access goods via local websites such as TradeMe and
international sites such Amazon. We make use of online
services such as banking, airline bookings and comparing
insurance costs. Some businesses have retained a physical
presence and added an online facility (“bricks and
clicks”), while others are “clicks” enterprise as they only
operate via the internet. Owners of smartphones or tablets
can conduct much of their shopping with their hand-held
devices. [See further information on E-commerce.]
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Call centres, many of them located overseas, are used to sell us products and to deal with
our queries about computer issues or lost credit cards.
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We can sit in our lounges and buy from home shopping channels which broadcast on
digital television.
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As our population has become more ethnically diverse, the range of cuisine options
available to us has increased.
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Despite the huge range of food and wine offered by supermarkets, there has been a move
by some consumers to shop at weekend farmers’ markets and small specialty food
stores such as Nosh and Farro.
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How we pay for our shopping has also changed. Cheques have almost
disappeared, cash is used in fewer circumstances, but the use of electronic
transfer payments has grown enormously.
Perhaps the most significant change is that consumers and businesses are now very
comfortable operating in a global marketplace. That is, buying internationally known brands,
wearing clothing that has been manufactured overseas, and using the world wide web to
research, select and pay for goods and services.
E-commerce
FROM BUSINESS PERSPECTIVE
FROM CONSUMERS’ PERSPECTIVE
ADVANTAGES
 access to the global market means
the business will be better known
 a business using e-commerce an
operate more competitively
 increased sales, leading to
increased profit
 it may be possible to dispense with
shopfront operation, which
represents a saving
 reduced advertising costs
 increased sales lead to economies
of scale
 business operates 24/7
ADVANTAGES
 customers have a huge range of
goods to consider from a large
number of suppliers
 they can “shop around” online for
the best prices
 can shop from the comfort of their
homes 24/7
DISADVANTAGES
 being part of the global market
increases the level of competition
 specialists may be required to
design and update the website
 market research needs to be very
detailed to ensure the needs of
global customers are met
 packing and distribution of
products can be costly and involve
long distances
 not all of the business’s target
customers may have access to the
internet
DISADVANTAGES
 consumers need to own or have
access to computers and have an
internet connection
 it is not easy to assess the quality
and suitability of products on the
screen
 returning unwanted goods can be
inconvenient
 a debit card or credit card is
required to make internet
purchases
 buying online can pose security
risks
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IMPACT OF THE RECESSION
An economic recession is defined as six months of declining gross national product
(GNP). A recession that lasts for a year would be known as a double-dip recession.
A recession has serious consequences for the business sector and the economy as a
whole. In a recession:

Fewer workers are needed therefore unemployment increases
Incomes fall therefore …
Demand for goods and services decrease
Government tax revenue falls as less income tax and GST is received
Firms produce less (therefore have spare capacity)
Well-managed businesses may be able to take advantage of a recession. Capital assets
such as land may be relatively cheap and firms could invest in these in expectation that
the economy will eventually improve. The risk of retrenchment and job losses could
encourage improved relations between employees and employers, which could increase
efficiency. The recession may cause the business to perform in a leaner, fitter manner by
closing unproductive branches or making tough decisions which will actually improve
profitability.
THE SWOT ANALYSIS TOOL
Business owners cannot afford to be complacent about the current success and future viability
of their enterprise. A very effective tool for auditing a business and its environment, both
internal and external, is a SWOT analysis which helps a business focus and build on its
strengths, minimise weaknesses, take the greatest possible advantage of opportunities
available, and anticipate any threats the business might face.
Internal Analysis
The capabilities of the business, its strengths, and its areas of weakness should be examined.
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Strengths:
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What makes you stand out from your competitors?
What do you do well that your competition can’t?
What do other businesses see as your strengths?
Consider this from both your point of view and that of your clients. Don't be modest. Be realistic. If you are
having any difficulty with this, try writing down a list of your characteristics. Some of these will hopefully
be strengths!
Weaknesses:
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What do you do badly?
What do your customers complain about?
What could you improve?
Are your reputation and market presence as strong as they could be?
What are the areas of struggle for your company?
Do you have the staff and technology to provide top-notch customer service?
S
W
Strengths might include
 The firm’s particular expertise if it operates in a niche market
 A new innovative product or service
 The location of the business
 Top quality products, processes and procedures
 Considerable customer goodwill
 Quick to respond to market changes
Weaknesses might include:
 Lack of marketing expertise
 Undifferentiated products/services, relative to competitors
 Poor location
 Damaged reputation
 Low capital base
External Analysis
Do an environmental analysis to identify opportunities for the business, and any threats or
obstacles to performance.
Opportunities:
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Where are the opportunities for your business or services?
What are the trends in your area of specialty?
Will changes in demographics, social patterns, or lifestyle changes affect your business?
Is your business sector expanding?
Are there emerging trends that fit with your company's strengths?
Is there a product/service area that others have not yet covered?
Threats
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What obstacles do you face?
What is your competition doing?
Are your competitors becoming stronger?
Are the required specifications for your products or services changing?
Do you see other external threats to your company's success?
What is happening in the country, in overseas countries you trade in, in the economies?
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O
T
Opportunities might include
 a new developing or international market
 a market vacated by an ineffective competitor
 new market segments that offer improved profits
 mergers, joint ventures, or strategic alliances
 new distribution channels possible
 could be taking better advantage of social media for promotion
Threats might include
 a new competitor in your market
 price wars with competitors
 a competitor with a new, innovative product or service
 competitors with superior access to channels of distribution
 recession restricting customers’ discretionary spending
 uncertainty caused by ongoing earthquakes in Christchurch
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