Final answer:
An enterprise must evaluate key aspects such as the production process, market power, product similarity, barriers to entry, and competitive strategies like pricing and advertising before introducing a new product.
Step-by-step explanation:
Before introducing a new product, an enterprise should ask itself several critical questions to ensure the potential success and sustainability of the product within the market. These questions focus on understanding the production and cost conditions, market structure, and competitive dynamics that will affect the product's viability.
- What product or products should the firm produce?
- How should the firm produce the products (i.e., what production process should the firm use)?
- How much output should the firm produce?
- What price should the firm charge for its products?
- How much labor should the firm employ?
- How much market power does each firm in the industry possess?
- How similar is each firm's product to the products of other firms in the industry?
- How difficult is it for new firms to enter the industry?
- Do firms compete on the basis of price, advertising, or other product differences?
Answering these questions allows the firm to strategically position its new product in terms of differentiation, cost-efficiency, market targeting, and pricing strategies that align with its overall business objectives.