In 2022, the U.S. economy grew by around 2%. With year-on-year massive growth, many markets become saturated as new and old businesses look to get in on the ground floor.
To understand how a saturated market can occur, it's important to learn more about how the process occurs. What are the contributing factors to this phenomenon?
Looking to learn more about market saturation? You're in the right place to expand your education! Read on to find out everything you need to know about market saturation.
The Basics of a Saturated Market
Market saturation occurs when a market is swamped with a certain product or service. Imagine a small town of about 15,000 people, featuring a small main street. Now imagine that town features 50 burger joints, tipping the scale of supply and demand.
In that case, a market could be said to be saturated by burgers (and with saturated fats!). Anyone opening a new burger joint in the town would need to go above and beyond to make their business stand out.
This can cause businesses to struggle to compete for a limited share of the market. On the upside, consumers benefit from lower prices and an increased range of products. Businesses may also take steps to improve the quality of their offerings in order to gain a competitive advantage.
The above is just an example. Market saturation can occur in any business, from fabricating to financial services. And it can happen on a global scale, causing major issues for economies worldwide.
A New Craze
When a product or service becomes very popular, businesses race to get in on the ground floor and grab a slice of the profits. Old companies may expand into new fields, while tiny start-ups try to get involved too.
A good example of this is the world of video games. Initial video games were pet projects, made by a small group of scientists trying to create something fun for their own amusement. But once the earliest games became popular, businesses everywhere jumped head first into the new world, producing consoles and games left, right, and center!
Today, the video game market features more games than any one person could ever play. Companies putting out new games are dealing with a saturated market and need to fight against swarms of competition, like a corporate game of Space Invaders!
When larger businesses expand into new territory, this can contribute to a saturated market.
Sometimes, even multinationals get in on the action. Global expansion into a new area can cause a major problem. Global expansion may exacerbate the issue, but it can create lots of jobs too.
Saturate Your Brain With Knowledge About Market Saturation!
Market saturation is a complex and fascinating process. But if you're in business, it's a good idea to learn as much as you can about it. This can help you learn more about how to thrive in a saturated market.
We hope you enjoyed reading our article and learned a thing or two about market saturation. Looking for more entertaining and informative content? Check out our blog and saturate your brain with knowledge!