helen mba _2 - Nelson Mandela Metropolitan University

the service or product buyer needs. This competitive, pressurised environment willincrease the knowledge of market information and motivate progress. A number ofindependent domestic buyers also stimulate the progress of entry and investment intothe home market.The reason for this is that the perceived risk that a firm will be shut out of the marketand limit the bargaining power of a dominant buyer, is reduced. Cravens (1994:37)suggests a customer-oriented analysis that includes determining who the customersare, identifying the values they are seeking, comparing the organisation’sperformance to its competition, and identifying why customers consider one firmsuperior to another.(c)Rate of growth of home demandAccording to Porter (1990:94), the rate of growth of home demand can be asimportant to competitive advantage as its absolute size. The rate of investment in anindustry is a function of how rapidly the home-market size is growing. Rapid domesticgrowth leads a country’s firms to adopt new technologies faster, with less perceivabledanger of the investment being made redundant, and to build large, efficient facilitieswith the confidence that they will be utilised. Thompson (1997:281) supports Porter byadding that slow growth of the industry increases the pressure upon competitors tofight for market share.(d)Early saturationPorter (1990:96) says early penetration helps local firms become established. Earlysaturation forces them to continue innovating and upgrading. A saturated homemarket creates pressure to cut prices, innovate on product features and performance,and provide other incentives for buyers to replace old products with newer versions.The result is a shakeout of the weakest firms and often the emergence of fewer butstronger local rivals.40