Introduction
Markets across the world have different characteristics that define their viability and suitability to participate in the global economy. These markets are identified by their most prominent characteristics that enable smooth transactions and flow of business. Markets can also be analyzed for their attractiveness to certain customers, companies or organization depending on the set of characteristics they exhibit. The more characteristics a market exhibits, the more attractive it is. The following are the most significant characteristics of markets that distinguish them as viable and suitable to buyers and sellers who wish to transact their business in the market. Different market structures have different characteristics but below are the most popular among them (Hitt et al 2007, 140).
Discussion
1.) Market size
This is an extremely significant aspect of the market as it defines the size and vastness of the market and its ability to hold more sellers and buyers. The number of transactions within a market is profoundly determined by the size of the market and its capacity to facilitate more transactions. Smaller markets have less business going on unlike large markets where more transactions take place as observed by Kobold (1996).
2.) Market growth rate
The projected market growth rate is significant because more suppliers tend to favor market with a high-growth rate because it yields more profits. Kurtz et al. (2009) found out that markets that have high-growth rate have more suppliers supplying goods to consumers because as the market grows at a swift rate, then demand for goods and services increases and attracts more suppliers. Consumers also favor fast growing markets because more commodities and services are available in the market and they have a wide variety to choose.
3.) Number of competitors and fragmentation level
The number of competitors a market has depends on the market structure. For the case of a monopoly structure, competitors are darned few because there are barriers to entry into the market and, therefore, no suppliers are allowed to access the market. However, in the case of other markets like perfectly competitive markets, there are no barriers to entry and, therefore, more competitors. More suppliers favor a competitive market because it enables product differentiation and leads to eventual market fragmentation. It also makes them produce desirable products attractive to consumers. It this market, consumers have a wide variety to chose from because more products from different suppliers are available as found out by Boyes and Melvin (2007).
4.) Barriers to entry
As mentioned earlier, barriers to entry are practiced in a monopoly market structure hence minimal suppliers have access to the market. The restriction of new entrants to the market leaves no room for competition and, therefore, the market does not attract any consumers or suppliers.
5.) Market profitability and returns
Markets with high profits and returns attract more consumers and suppliers because they are assured of high profits and returns on their investments. The market guarantees the going concern of much business within it and, therefore, suppliers are certain about the future and profits are consistent. This market structure is aided by other factors like size and technological level of the market.
6.) Technological level and skills
Markets with advanced technology levels attract more suppliers and consumers because of the easiness to transact business and the quality of products and services offered, technology helps in production of quality goods and services and hence the market attracts more consumers. The market reduces production costs and therefore, manufacturers find it less costly to produce goods, which lead to increased production Mankiw (1998, 179).
Conclusion
Markets are defined and identified by the above-mentioned characteristics, which may either attract more suppliers and consumers or fail to attract because of restricted entry or other characteristics. It is essential that, in an economy, markets consider such characteristics for the success of their business.
Bibliography
Boyes, W. and Melvin, M., 2007. Microeconomics. London: Cengage Learning
Hitt, M. A., Ireland, R. D. & Hoskisson, R. E. (2007). Strategic Management: Competitiveness
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Kobold, K. 1996. Interest Rate Futures Markets and Capital Market Theory: Characteristics.
Berlin: Walter de Gruyter
Kokko, A. (1997). Technology, market characteristics, and spillovers. Journal of Development
Economics, vol. 43 (2), p. 279-293
Kurtz, D. L., MacKenzie, F. H. & Snow, K., 2009. Contemporary Marketing. London:
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Mankiw, G., 1998. Microeconomics. Stockholm: Elsevier
