How do market forces shape organizational responses?
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Market forces affect organizational responses in many ways. Market forces include things such as supply, demand, and marketing to consumers.
Supply is the amount of goods or services available in a market. Demand is the number of goods or services desired in the market. For example, a new soda may be placed into the market. The supply of the soda is greater than the demand of the soda. Thus, supply and demand have an inverse relationship. Organizations want to reach a point called equilibrium where supply and demand are equal. This is the ideal point in the market. Supply and demand are also measured by price.
Marketing is an activity that can change the equilibrium point in supply and demand. Marketing can increase the deman of a good or service, thereby shifting the equilibrium. That is the point where supply and demand meet the consumers' needs.
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