Market Structure and Business Strategy Evolution

1. The Market Definition

A market is constituted by a set of buyers and sellers of a product. The relationship between the company and the market is essential for its activity, because ultimately what justifies its existence is its ability to provide goods and services.

Evolution of the Business-Market Relationship

The relationship between businesses and the market has evolved through several centered approaches:

• Production-Centered Approach: The company focuses on the production of a standardized product and the creation of a distribution network. (Late nineteenth and early twentieth centuries).
• Product-Centered Approach: As supply increases, firms face more competition, focusing their activities on improving the product. (Appeared from the first quarter of the twentieth century).
• Sales-Focused Approach: When supply exceeds demand, the company focuses on increasing sales using aggressive strategies. (Characteristic of the 1960s).
• Marketing-Centered Approach: To increase consumer demand, companies must increase the adaptation of their products to consumers and maintain a close relationship with them, allowing for quick adaptation to new needs.

1.1. Market Classifications

Characteristics of Buyers

• Consumer Market: Includes immediate, lasting goods, and services.
• Industry Market.

Number of Competitors

• Monopoly: There is a unique company operating in the market.
• Oligopoly: There are few companies offering the same product.
• Monopolistic Competition: Multiple companies offer similar products, differentiated by factors such as brand, model, or design.
• Perfect Competition: There are many vendors who sell a homogeneous product.

Degree of Novelty

• First Hand: New products.
• Second Hand: Used products.

Geographical Scope

• Local
• Regional
• National
• International

Relationship with the Company (Sales Types)

• Current Market: Sales of the company at any given time.
• Potential Market: Maximum amount of sales that the company can reach at any given time.
• Trend Market: Expected future sales based on reasonable estimates.