Why the Emphasis on New Goods and Services
As the world becomes a single global economy most firms have seen a significant increase
in foreign competition in their respective markets. The reasons for this increase in foreign
competition are many including.
- Advances in telecommunication technology such a the Internet which now
provides connections to literally every corner of the world.
- A trend to lower trade barriers such as import duties and tariffs on foreign good and
the creation of trade organizations such as NAFTA and the European Union.
- The faster speed at which good can be transported.
The combination of increased competition and the greater availability of information has also resulted in more educated consumers who now expect new products to be introduced more frequently. In such a highly competitive environment, the markets for these goods and services tend to reach their maturity much sooner than was previously the case. As a res ult. these products become commodities much sooner. and their profit margins therefore tend to erode more quickly.