How to Evaluate a Fluctuating Market and Strategize for Growth
The market is constantly changing. The nature of our free market economic system implies uncertainty for all business endeavors. If your company or corporation is going to be successful, you’ll need an effective growth strategy. This must take into account the capricious and unpredictable financial climate of our market system.
In order to develop business growth in a market with fluctuating conditions, it’s a good idea to familiarize yourself with the different market types and possible market conditions. With a baseline education and understanding about how the market could possibly work, it will be much easier to create a strategy that promotes business success, even despite the changing market conditions.
What you should know about market trends
In this article, we’ll cover a few ways to evaluate the market, types of market conditions and what impacts the market. We’ll also guide you through market structures.
If you’re not quite sure how to effectively evaluate market trends, economics, or financial situations, it’s a good idea to work with an experienced consulting firm that specializes in business and corporate consulting. Whether you’re restructuring, considering a merger or acquisition, or just starting up, at Hunter Stevens our specialty consulting services will facilitate your business in developing an effective approach to success.
Evaluating the current market
There are two general types of market conditions: ranging and trending. Knowing how these conditions can impact your business will help you make good, strategic decisions for long term success.
- Trending: Trending markets are clearly moving either up or down. They indicate an overall direction of prices and profitability.
When the trend is going up, it is known as an uptrend. Uptrends tend to be profitable, and are usually defined by a series of steadily increasing peaks.
When the chart is on a downward trend, it is known as a downtrend. Prices, and thus profitability, are going down.
Strategizing based on trend is not only about paying attention to uptrends, but rather the strategic awareness of either an uptrend or a downtrend, and how they relate to your desired strategic business goals. One strategy involves purchasing or investing at a low price, and selling at a high price.
- Ranging: Ranging markets are less clear, with a large range between upward and downward peaks and troughs. Investments or business decisions based in this type of market condition tend to be more unpredictable and erratic. This might increase risk, but could also prove useful with higher returns.
What factors influence market conditions?
There are four major factors that contribute to, influence and shape market climate. It is important to be familiar with these conditions so you can identify them, then effectively evaluate business decisions for strategic growth.
Government Policy
Financial status of the national economy is strongly tied to fiscal arrangements determined by national governmental bodies. Specific government regulated factions like interest rates, or price stabilizations implemented by central banks or the Federal Reserve can greatly impact the market.
Global Commerce
Financial exchanges across borders can also largely influence market conditions. International trade is a determining factor of economic status, and currency value. Topics like imports, exports and internal investment systems all play a part in the global market.
Speculation
The global marketplace is vastly determined by expectations of the future economic trends. Investors, governments and even consumers offer different perspectives regarding where trends in spending will go. These ideas combine to tilt market conditions.
Supply and Demand
As the ability to supply products and services shifts, so do prices. As demand for products and services shift, so do prices. These fluctuations influence the overall market.
Types of market structures
There are four basic market structure types. Each has its own characteristics and can influence your business success differently.
- Monopoly – In a monopoly only one enterprise controls the entire market. Because there is one dominant firm the product or service is usually sold at unfairly high prices.
- Monopoly Competition – This market structure is oriented around a variety of businesses selling similar products or services, but they fall into smaller niche categories. There is a larger range of prices in this system because of the distinctions between products.
- Oligopoly – This is a structure where there are only a few corporations selling certain products or services. Since there are limited options, competition is low. Therefore prices can stay high, and quality is not necessarily regulated by attempts for competitive growth.
- Perfect Competition – In a perfect competition market structure, various corporations compete to sell products or services. This offers a built in self-regulation process where prices must remain relatively competitive and products and services must be of high quality. This structure is best for consumers.
Is this the right economic climate for my upcoming business changes?
An inconsistent market is inevitable. Our free market system practically demands an oscillating and ever evolving economic and financial market. This means, in order for your business to grow and succeed, you need an effective strategic plan. However, strategic planning for growth can be difficult if you’re not equipped with the know-how to approach changing market conditions.
It can be helpful to seek expert support from a specialty consulting firm that is versed in providing strategic growth services for businesses and corporations. Hunter Stevens LLC has been serving clients for over 25 years, offering professional strategic advising and financial guidance services to support start-ups and long established businesses find growth in changing market conditions.
How can we help you? Contact us today and start strategizing for growth.