Market saturation can have several effects on businesses:
1. Reduced Profit Margins: Increased competition often leads to price reductions, which can reduce profit margins. 2. Innovation Pressure: Companies may need to invest heavily in innovation to differentiate their products. 3. Market Exit: Less competitive businesses may be forced to exit the market due to unsustainable operations. 4. Customer Loyalty: Businesses might focus more on customer retention and loyalty programs to maintain their customer base.