A detailed evaluation of each organisations strengths and weaknesses in the face of market competition
An external influence is an event or an occurrence that is not controlled by a business that has an impact on the predictability and performance of the business. A huge example of an external influence was the terrorist attacks of the United States, which affected a range of businesses from airlines to ferrying. There are many issues of external influences that both David Allen and Nissan have to deal with such as market competitors, economic conditions and environmental constraints which can either be random and uncertain or predictable and be easy to handle but there is no way of avoiding them.
An example for Nissan of uncertain external influences is, there could be an economic decline, which would affect people’s confidence to purchase expensive things such as cars because of their financial instability. An example of predictable external influences for David Allen is consumers may start to lose interest in David Allen therefore the business has to change its activities accordingly. The three main external influences that I have chosen to use as an example as external influences for David Allen and Nissan are market competition, environmental constraints and economic conditions.
Market competition Today businesses like Nissan and David Allen operate in a competitive market. This means that these types of businesses offer a similar type of service or product. Its not just Nissan and David Allen that has businesses competition in their particular markets nearly all businesses face competition from other businesses. For example, in the market for alcohol there is Carling, Carlsberg, breezer and many others or in television manufacturers there is JVC, Panasonic, Sony, Philips and others.
Market competition gives the customer the chance to explore more than one option and relies on the different businesses to compete for their business such as Nissan would have to compete with other manufacturers for customers. Some organisations such as Nissan am to sell large volumes of goods at low prices all the time to provide a highly competitive service such as its sells cheaper than both Alfa Romeo and WV. Usually the more competitors there are in a market, the cheaper the goods or service are offered.
An example of this type of competition is the Internet provision. When the Internet first became available, there was a limited number of service providers, all of them charging between £10 and £20 a month for access to the service. Then organisations such as Dixons started offering a free Internet service, putting pressure on the other providers to drop their prices to stay in business. There are three types of competitors’ locations: Local Competitors A business will have local competitors if it provides convinience goods or services.
A customer is unlikely to travel a distance to buy something small if it has a local supplier but a local business can be under pressure to compete with national providers. The same applies to organisations that provide goods or services to industry. A company, which provides a service, will compete against local service because it provides a personal service. A local competitor is something that David Allen is categorised as because it provides a service to the local towns of Winslow and Buckingham.
David Allen provides a service to the local communities and it has several competitors such as Taylor, Brown and Mary. International competitors Many organisations operate internationally particularly if they are involved in industry like Nissan is. International trade is increasing at a much faster rate than the incomes of individual businesses res6raicting themselves to national markets. There are a number of reasons why Nissan trades internationally: ) Nissan might have outgrown their market and so there would be more chance at selling to more customers abroad. b) Overseas customers might be willing to pay more for the vehicles that Nissan sell. c) It might want to spread its risks by selling into a number of countries. For an example if the UK market has a downturn that wouldn’t effect the market that they sell in Germany for instance. d) Barriers between trades may be reduced if Nissan goes international and there will be no tariffs.
International competitors are competitors that are spread out all over the world but still compete in the same market. The competitors in this market are very large companies that have a product or a service that is wanted by numerous countries. National competitors National competitors are businesses that compete in the market restricted to all over the UK. There are markets like this because consumers a likely to travel further to compare prices and quality of expensive purchases. Although Nissan sells internationally most organisations do sell nationally.
Both of the businesses don’t sell in this type of market because of there types of business do compete national but there is a sharp increase in businesses moving towards an international market. Direct competition Direct competition is the competition that a business gets from suppliers or sellers of the same type of product range or service. A type of business that comes into this could be either Nissan or Ford, which both sell vehicles or David Allen and Taylors that both offer a service to customers’ to sell their homes.
Indirect Competition Indirect competition relates to competition to different types of competition from different goods and services which are not in the same market but all compete for the consumers money. An example of this is Nissan selling cars but another company selling motorbikes, which means that they will compete for the consumers to have their product. Identifying Nissan’s and David Allen’s competitors Nissan’s competitors are all types of vehicle manufacturers because in this type of market the customers tend to look at every option.
The types of major competition that Nissan has are Ford, Honda, Vauxhall, BMW, Alfa Romeo, Renault and others which are a type of direct competition because they sell the same type of products such as vehicles as Nissan. Smaller competitions are local dealers because customers tend to look locally before out of their area and they are direct competition. Types of competition that Nissan has that are indirect are dealerships that offer other types of products that still are in the same market as Nissan such as dealer that sell motorbikes or others that are not directly linked to Nissan’s customers but do still compete for their money.
David Allen’s competitors are all local estate agents in the areas of Winslow and Buckinghamshire and they all offer the same service of helping customers to sell their house for a commission. As David Allen are only a local business they and they only offer a service they only have direct competition. The major competition for David Allen are the local estate agents in both Winslow and Buckinghamshire such as Connals, Mark Berry, Michael Graham, Brown and merry, Thomas James and Nicholas which are all direct competition because they all provide the same service as David Allen.
David Allen doesn’t have any indirect competition because in its area there are no businesses that offer a service that attracts the same customers as it. These are competitors of David Allen because of the way that they try to compete for the same customers in the market of estate agents in the local towns of Winslow and Buckinghamshire, which directly links to the performance of David Allen.