What factors affect market attraction?

The concept of market attractiveness offers a way to explore and measure market capabilities in terms of its potential profitability. The concept examines a much wider range of characteristics than just focuses on the possibility that the market will grow. In addition to looking at the size of the market and growth level, the concept focuses on functions such as market risk, competition level, segmentation, variability of demand, negotiating force and input obstacles. Before developing a product and marketing plan for a particular market, the company must explore all these functions and determine the attractiveness of the market. The attraction on the market could be increased if there is an opportunity for the enterprise to distinguish its products and services on the market and therefore differentiate from competitors. However, there could be a threat of substitute products and services that can make the market potentially risky. Factors such as the distribution structure required on the market may be more suitable for some companies than for others, depending on the level of resources and skills in the company.

The competitive intensity on the market must also be considered. It can dominate several large companies on the market or include a large number of smaller competing businesses, which could affect the ability of the new participant to stand on the market and carve their market share. The strategy of large companies towards new market participants could be aggressive and where some existing companies have a strong brand recognition and marketing capacity, it may be difficult for new participants to advertise or get products recognition. The market can already be saturated and offer a small profit for new participants.

Barriers to the market could be relatively few, allowing new competitors to be created in a short time and using any changes in technology, consumer demand or logistics. On the other hand, products sold on the market may require high production costs and investments in expensive plants, which makes unattractive entering the market due to significant RIzica failure. The main barrier to the market can be a regulatory nature, and this could change with the stroke of the legislature. The technology used in this sector may be at a place of significant development or a breakthrough that could prefer new participants. All these factors affect the level of market attractiveness.