advantage and disadvantage of market drivers?
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Answer:
Advantages of Being a Market Leader
Market leaders are often able to leverage their position in order to increase cost efficiency. Not only are they able to employ large economies of scale to reduce the per-unit cost of the product, but they also use their first-mover advantage to set price trends and essentially control the market.
Consumers tend to buy overpriced products from market leaders even when they are aware of overpricing because it enables them to minimize risk. Market leaders possess strong prestige and brand value. Strong brand loyalty also enables them to not only retain existing customers but also attract new ones.
A market leader also tends to be aware of the purchasing decisions made by its consumer base, owing to access to large datasets. It enables them to use aggressive marketing practices to strengthen the brand image of their offerings.
Market leaders are able to minimize their input costs by negotiating with suppliers. Usually, industrial suppliers offer heavy discounts as the volume of each order increases. They also attract the highest quality of development partners when they outsource the functions of their value chain. It offers them the best possible technical expertise. They also gain access to better distribution channels, etc.
Disadvantages of Being a Market Leader
When a company dominates a given industry, competitors might accuse it of monopolizing the market. It can invite antitrust legislation and the attention of market regulators, etc.
For example, Amazon‘s been accused of engaging in predatory pricing techniques repeatedly to outsell its competitors and gain market share. Market leaders also tend to aggressively pursue takeovers of potential competitors, which can affect their brand value.
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