Other Businesses

Section 1: Impact of Competitors

Businesses operate in a competitive environment where other businesses offer similar products or services.
A company’s competitive position is determined by factors such as price, quality, after-sales service, brand reputation and, more recently, a business’s environmental impact.
A market leader can influence its competition’s business strategy by setting trends and dictating terms.
Competition can encourage innovation, efficiency, and improved client service.

Section 2: Interdependence Between Businesses

Businesses are interdependent, and operations can affect and be affected by the performance of other businesses.
Suppliers, for example, are a key external influence. Their pricing, delivery and product quality can make a significant difference to a business’s success.
Supply chain relationships or partnerships can offer opportunities for collaboration and mutual growth.
Dependency on a single supplier can be risky. Multiple suppliers offer stability, negotiation power, and assurance against price manipulation or supply disruptions.

Section 3: Influences of Businesses on Each Other

Businesses can exert indirect influence on each other. For instance, a successful marketing campaign by one company may cause a spike in industry demand, benefiting competitors as well.
Direct influences occur when actions such as price adjustments or abandoned product lines cause rivals to change direction.
Actions from one business can also impose external costs or benefits, called externalities, on others. Businesses may increase advertising spending to match their competitors’ efforts, for example.

Section 4: Collaborations and Joint Ventures

Businesses sometimes collaborate or merge to maximise resources, access new markets, or gain a competitive edge.
These strategies can scale up operations, boost market reach, and enhance industry influence.
Long-term strategic alliances or joint ventures can help businesses achieve common goals that might be challenging for them to reach independently.

Section 5: Coping with Business Influences

Part of effective business management involves assessing and responding to the influence of other businesses.
Regular market research and monitoring of competitor actions help in keeping abreast of industry trends and staying competitive.
Businesses must remain innovative and adaptable to retain their market standing and successfully negotiate influences by other businesses.