Study the demand elasticity for its products and discuss the availability of close substitutes for its products. How does that affect pricing decisions? Analyze the company’s profitability. Identify the economy or industry influences on its costs, operations, and profitability. Describe the competitive environment in which the firm operates, the distribution of market power, and the strategic behavior of the firm and its competitors.
Therefore, the equilibrium rate of growth is given by matching proportionate change in output with the ratio of savings-output to that of capital-output. This sustains the economy along some warranted steady growth path. According to the model, temporary deviations from the warranted growth path would not be self-correcting. Because of the lack of self-correcting forces within the dynamics of the model, it is said to be characterized by ‘knife-edge instability’. That is, market-regulated growth espoused by the model is unstable and, thus, necessitates government intervention.
There are reports that say the economy will grow over the next few years (2010), but there is a possibility that they could be wrong and that won’t happen. If the opposite happens and the economy hits a decline, this could really hurt the business of Keystone and many other companies for that matter. On that note, people will start looking to save money and if they can find the same product that this company offers for a cheaper price, they might just do that. The last red flag that I would see when deciding whether to select this client would be the fact that they have recently started extending credit to customers with less than perfect credit (2010). Although this could mean nothing, this could also be the beginning of a downward spiral of bad debt.
Unemployment will drop, to a work rate above that of full involvement. Price levels will also rise for the short-term. There are different reasons why business managers need to pay attention to supply issues. As well as production costs, supply matters affect other business expenditures. Analyzing demand benefits business manager’s make good decisions regarding sales and production levels (University of Phoenix,
Which one? If not, what economic system do you think your nation runs? 2. In the space below, organize your economic data. Highlight statistics that you think would indicate that your country runs a market-oriented economy.
Recession occurs when people involved in business become more cautious and: * Customers cut back on spending, and start to save more * Manufactures and sellers cut back on their orders, produce fewer goods and start to cut back costs in general, including by laying off workers. Availability and cost of credit: People spend more when there is high demand for goods/services. In this case etisalat has the advantage of expanding their business. Many people will want to purchase numbers and different offers provided. A higher sales revenue will occur for etisalat which means the income the company receives from business activities, usually happen from sale of goods and services to customers.
* Product lines that were not covering their avoidable costs could be dropped. * New product development is likely to receive more focus as the review program identifies areas of increasing demand. * Gourmet is likely to benefit from better monitoring of competitors’ product development, prices, and market share trends. F. This is an open-ended question; the specific steps are likely to vary based on the circumstances and the information found. Analysis for a given product might include the following general steps: * Identify the product to be analyzed by using a quantitative monitoring technique (e.g., size decline in contribution margin or sales) or some other method * Obtain and analyze detailed revenue and cost data prior periods; look for negative trends * Obtain and analyze the correlation of sales for this product with other products; look for potential relationships with other products that might influence a decision to drop the product * Obtain and analyze industry information about the product; look for information about trends in customer tastes, competition,
The level to which higher demand increases output and prices depends on the state of the business cycle. Without changing the price level will lead to an increase in demand if the economy is in recession. A fiscal expansion will have more of an effect on prices and less impact on total output if the economy is at full employment. To restore output during a recession the government can run an expansionary fiscal policy helping to restore and to return the unemployed to work. The government can run a budget surplus; this will help to slow the economy when inflation seems to be a larger dilemma than unemployment, leading to a budget balanced on
After the level goes to certain degree, adding up the same amount of inventory investment would lead to less increase in customer satisfaction. Therefore, in order to balance the cost with the desire to satisfy the customer, it is not enough to only increase inventory investment, the best solution
If the gross profit falls from one year to the next or is thought to be too low the firm may need to decrease the costs of its purchases or may try to increase the sales without increasing the cost of the goods sold. The same thing applies to the net profit margin if it is too low or falls year on year then the business may need to look for cheaper premises or cut staffing costs. Return on Capital Employed will be used to see if an investment is worth the capital outlay, if the return from the capital outlay is higher than the interest offered by banks for money invested then the outlay is justified. you then have to talk about Liquidity,The Debtors’ and creditors’ and then an overview of it all