MARKET STRUCTURE ( Essay Uk., 2018 ) is the number of buyers and sellers in a market.

There are
different market structures such as Perfect Competition, Monopoly and Oligopoly and are discussed
below:

1.1 PERFECT COMPETITION

A market structure where there are different sellers of the same product then the firm’s price
determination and the output decision depends upon the demand for their products. In a competitive
market buyers actually determine the price and firm take the output decisions as compare to the
demand for the product because every firm tries to offer lower prices to their customer to increase their
market share.

1.2 MONOPOLY

It is the market structure where it has monopoly and is the sole provider then price determination and
output decision lies by the firm because in a monopolistic market the firm is the price maker and they
can charge whatever price they want and customer have to pay because customers will not have the
choice to buy somewhere else with a lower price, firm will produce with its full capacity because the
they will be bound to fulfill the demand as a whole for their products, normally multinational firms
operate in such market structures.

1.3 OLIGOPOLY

A market structure where there are several large sellers of the same products then the sellers have some
control over the price because large sellers normally set an ongoing rate for their products i-e they all
charge the same price and then it depends upon the customers from whom to buy. Sellers may charge
the same price but there will be difference in the way they advertise their products and attract
customers to purchase their products, in oligopolistic market firms take decision of output in the light of
the demand from their customers towards their products.

ILLUSTRATE THE WAY IN WHICH MARKET FORCES SHAPE ORGANIZATIONAL RESPONSES USING A
RANGE OF EXAMPLES.

2.0 MARKET FORCES

FORCES THAT DETERMINE THE PRICE LEVEL IN THE ECONOMY. MARKET FORCES CAN BE;

 Demand
 Supply
 Employees
 Customers
 Suppliers

Two things can happen with the demand and the organizations are bound to give response for both i-e
Demand for products can increase and decrease. If the demand for product increases the organization’s
response for the increased demand will be they will hire more workers and will produce with full
capacity. If the demand for the product decrease there will be decrease in cash inflow of organization
due to which their costs will exceed than their profit. Organization response for such situation will be
that they will cut jobs of their employees to cut their costs.

Same as the demand two things can also happen with supply of the products. When there is increase in
supply of products the demand will decrease while if there is a decrease in supply of the products the
demand will increase. Organization’s response for such situation is that they can produce whatever the
demand for the product they have so that they will not come up with an increased supply or supply
shortage.

Employee is also the factor that can change the behavior of the organization. If government announces
mini wage the organization must accept it and must pay their workers with a minimum wage. If do not
pay it to their workers, their employees will leave their jobs and will work for another organization.

Every organization aim is to satisfy their customers with their products. If any organization producing
fashion product but they do have continuous interaction with their customers as fashion changes after
every specific time period the organization will lose their customers because they won’t be able to fulfill
customer requirements and won’t be able to satisfy their customers with their products.

Every organization is dependent to its supplier and without supplies the production process is unable to
run. If supplier increases price for the raw materials it will automatically increase the cost of production
of an organization. If the products of an organization are price elastic, by changing the price there will a
big in the demand of the product then the organization can either negotiate with the existing supplier or
can change to another supplier, while if the products are price inelastic and by changing the price there
will be no change in the demand of the product then the organization can easily their prices.

JUDGE HOW THE BUSINESS AND CULTURAL ENVIRONMENTS SHAPE THE BEHAVIOR OF A SELECTED
ORGANIZATION.

3.0 POLITICAL

This refers to the government policy such as government intervention in what goods and services to
produce, which firm to subsidize etc. Political decisions also have an impact on business activities such as
health and education for workers and the infrastructure of the economy. Nokia transferred one of its
manufacturing facilities to India, it is important that Nokia have to follow all the rules in regulations set
in India. The rules and regulations by India for Nokia may include that Nokia must be aware of the
minimum wage, working hours per week and health and safety for workers etc. All the new law and
regulations by the government affect Nokia’s operations.

3.1 ECONOMIC
Economic factors may include the economic situations as a whole. These factors include interest rate,
exchange rate, inflation and economic development etc. Nokia’s Economic situation in Finland went to
recession period once which decreased the level of income and resulted in decrease in demand for
Nokia’s product. Due to an increase in costs Nokia cut jobs and unemployed some of their employees.
Nokia must be aware of all such economic situations to be ready to handle them well.

3.2 SOCIAL

Social is about the society. Social factors may include change in taste, change in level of income, change
in fashion etc. All the above factors affect the demand for the product, normally it happens with Luxury
and fashion products. Nokia operates in all over the world with their products and consider the culture
of every place they operate, now a day people want to have good looking and smart up to date phones,
Nokia tries to be aware of every social trends in the society and come up with the demanded products
by their customers.

3.3 TECHNICAL

This refers to a change and development in the way of production, as new technology improved the
quality of products, increase in productivity etc. For example bar coding, online games, high definition
TVs etc. Technology plays an important role in the success of Nokia as Nokia was considered as the
market leader with its new innovation such as internet, email and networking etc. Other rivals took
market position from Nokia and Nokia must be aware of any new innovations and add them with their
products to take their market position back.

3.4 LEGAL

This refers to the new laws applied on businesses by the government. Government passes different new
laws after every specific time period which increases cost of the businesses. Such laws may include age
discrimination, increase in minimum wage etc. Nokia operate where it is very difficult to have a product
different from its competitors. Before operating in any country Nokia must register its company with a
government and get a proper license to operate there. Nokia must protect the right of their designs so
that they do not fall into victim.

3.5 ENVIRONMENTAL

Environmental factors include a change in weather, climate. Environmental changes affect businesses
such as farming and tourism. Environmental factors are the external factors which firms have to consider
due to a global change in the economy. Nokia must be friendly with their customers to operate in
appropriate manner as they water proof cell phones, phones with a plastic body which can be
unbreakable etc.

3.6 ENVIRONMENTAL CULTURE

The attitude, behavior and the knowledge in a society is called the cultural environment. Cultural
environment can be of two types discussed below;

3.6.1 INTERNAL CULTURE

Any attitude, behavior, action or policy developed among people in the company is called the internal
culture of the company. Nokia’s internal culture is that there is a team work system among employees
and every employee has the right to share their ideas for the success or the achievement of the
company.

3.6.2 EXTERNAL CULTURE

Focusing on company’s own mission and needs of the customers that the company can quickly respond
is called the external culture. Nokia’s external culture is that they give customers service to their
customer as their first aim is the customer satisfaction and to achieve such satisfaction they always try to
come up with high quality of products. Nokia always have an interaction with their potential customer to
gain new ideas from them. Nokia always conduct their business in ethical, legal and socially responsible
fashion.

Reference:

Essays, UK. (November 2018). Pricing And Output Decisions Of Businesses Marketing Essay. Retrieved
from https://www.ukessays.com/essays/marketing/pricing-and-output-decisions-of-businesses-
marketing-essay.php?vref=1