... 3 Global Business Analysis: Market of Botswana and Diamonds 4 Global Business Opportunities 4 Economic and Geographic Environment 4 Social and Cultural Environment 4 Political and Legal Environment 5 International and Local Competition 5 Economic and Geographic Environment 5 Managing International Financial and Business Risks 6 Characteristics of Global Management Information Systems (MIS) 6 Characteristics of Global Human Resources 7 Characteristics of Global Marketing 7 Product Target Market Planning for Foreign Markets 7 Designing a Global Distribution Strategy 8 Selecting an International Pricing Strategy 8 Determining Organizational Financial Results 9 Key Success Factors for Global Business 9 Monitoring and Control 9 Recommendations 10 Conclusion 10 Appendixes 12 Executive Summary This business analysis is in reference to a foreign direct investment into a diamond business within Botswana. This analysis provides the information to determine, if Botswana is a viable country for investment. The pertinent information is in reference to the country’s culture, economy, geography, resources and other factors that will assist with our analysis. In conclusion, a favorable recommendation is given for investment in a diamond mining business in Botswana. Global Business Analysis: Market of Botswana and Diamonds Botswana population is over two million people and was primarily an agricultural based economy. In 1967, the country realized...
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...MANAGERIAL ECONOMICS DRM 12 VBHA SURENDAR CHHAJED MANONMANIAM SUNDARNAR UNIVERSITY ENROLLMENT NO:A11QO5166003 1. Explain Balance of Payments in detail? Balance of payments (BoP) accounts are an accounting record of all monetary transactions between a country and the rest of the world. These transactions include payments for the country's exports and imports of goods, services, financial capital, and financial transfers. The BOP accounts summarize international transactions for a specific period, usually a year, and are prepared in a single currency, typically the domestic currency for the country concerned. Sources of funds for a nation, such as exports or the receipts of loans and investments, are recorded as positive or surplus items. Uses of funds, such as for imports or to invest in foreign countries, are recorded as negative or deficit items. A country's balance of payments is said to be in surplus (equivalently, the balance of payments is positive) by a certain amount if sources of funds (such as export goods sold and bonds sold) exceed uses of funds (such as paying for imported goods and paying for foreign bonds purchased) by that amount. There is said to be a balance of payments deficit (the balance of payments is said to be negative) if the former are less than the latter. The two principal parts of the BOP accounts are the currentaccount and the capital account. The current account shows the net amount a country is ...
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...Entry and Exit Entrants threaten incumbents in two ways: First, they take market share away from incumbents. Second, entry often intensifies competition, leading to lower prices. This is a natural consequence of the Cournot and differentiated Bertrand models in which more firms imply lower prices. Some Facts about Entry and Exit There are three important implications for strategy: 1. When planning for the future, the managers must account for entry. 2. Managers should expect most new ventures to fail quickly. 3. Managers should know the entry and exit conditions of their industry. Entry and Exit Decisions: Basic Concepts The entrant must sink some capital that cannot be fully recovered upon exit – it is this element of risk that makes the entry decision difficult. The entrant hopes that postentry profits exceed the sunk entry costs. There are many potential sunk costs to enter the market such as specialized capital equipment to government licenses. The potential entrant may use many different types of information about incumbents, including pricing practices, costs and capacity to assess why postentry competition may be like. Barriers to Entry Structural entry barriers exists when the incumbent has natural cost of marketing advantages, or when the incumbent benefits from favorable regulations. Strategic entry barriers result when the incumbent takes aggressive actions to deter entry. Bain’s Typology of Entry Conditions * Blockaded...
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...(home) location of most of the world's leading multinational enterprises is: a. North America and Europe b. North America and Asia c. Europe and South America d. Europe and Asia 3. Which type of multinational diversification occurs when the parent firm establishes foreign subsidiaries to produce intermediate goods going into the production of finished goods? a. Forward vertical integration b. Backward vertical integration c. Forward horizontal integration d. Backward horizontal integration 4. Suppose that an American automobile manufacturer establishes foreign subsidiaries to market the automobiles. This practice is referred to as: a. Forward vertical integration b. Forward conglomerate integration c. Backward vertical integration d. Backward conglomerate integration 5. Suppose that a steel manufacturer headquartered in Japan sets up a subsidiary in Canada to produce steel. This practice is referred to as: a. Conglomerate integration b. Forward vertical integration c. Backward vertical integration d. Horizontal integration 6. During the 1970s, American oil companies acquired nonenergy companies (e.g., copper, auto components) in response to anticipated decreases in investment opportunities in oil. This type of diversification is referred to as: a. Horizontal integration b. Conglomerate integration c. Forward vertical integration d. Backward vertical integration 7. Which of the following best refers...
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...Q2 PRICING POLICY Pricing policy refers to how a company sets the prices of its products and services based on costs, value, demand, and competition. Managers should start setting prices during the development stage as part of strategic pricing to avoid launching products or services that cannot sustain profitable prices in the market. This approach to pricing enables companies to either fit costs to prices or scrap products or services that cannot be generated cost-effectively. Through systematic pricing policies and strategies, companies can reap greater profits and increase or defend their market shares. FACTORS INVOLVED IN PRICING POLICY The pricing of the product involves consideration of the following factors: (i) Cost Data in Pricing: Cost data occupy an important place in the price setting processes. There are different types of costs incurred in the production and marketing of the product. There are production costs, promotional expenses like advertising or personal selling as well as taxation, etc. They may necessitate an upward fixing of price. For example, the prices of petrol and gas are rising due to rise in the cost of raw materials, such as crude transportation, refining, etc. If costs go up, price rise can be quite justified. However, their relevance to the pricing decision must neither be underestimated nor exaggerated. For setting prices apart from costs, a number of other factors have to be taken into consideration. They are demand and competition. Costs...
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...Marketing Challenges in a New Economy There is a new trend in today’s economy that does not involve large chain suppliers, retailers or wholesalers. This new trend involves companies that allow owners to rent out their physical assets to increase their income. This new business practice puts the producer directly in contact with the consumer to conduct business. This new trend in the consumer marketplace is known as the share economy. This paper will discuss how this new concept of the share economy has had an effect on the traditional economy and whether the shared economy is creating new value for the consumer or if it is just replacing existing business. The share economy concept involves individuals renting out their physical assets. For example, an individual who is looking to increase their monthly income has the option to increase their income by renting out their home. Another example would be an individual who rents out their car, which would otherwise be unused in their driveway. According to Geron (2013) Forbes estimates that this new economy will generate revenue into people’s wallets that will surpass $3.5 billion this year, with growth exceeding twenty-five percent. This new share economy has been able to grow at a very successful rate and has impacted a stagnant wage market into a disruptive economic force (Geron, 2013, para 9). One element that has helped to drive the share economy is technology. Technology has helped in improving the connection between buyers...
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...Please read: A personal appeal from Wikipedia author Dr. Sengai Podhuvan Dumping (pricing policy) From Wikipedia, the free encyclopedia Jump to: navigation, search This article is about the economics term. For industrial relations and social justice issue, see Social dumping. For the tax avoidance term, see SUTA dumping. In economics, "dumping" is any kind of predatory pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price either below the price charged in its home market, or in quantities that cannot be explained through normal market competition. Dumping can force established domestic producers out of a market and lead to monopolistic positions by the exporting nation. For example, a glut of Chinese garlic exports in the mid 2000s forced many North American producers to switch crops and leave the market. When the price of Chinese garlic soared in 2009, the shuttered North American businesses were unable to quickly re-enter the local market due to barriers to entry.[citation needed] * | [edit] Overview A standard technical definition of dumping is the act of charging a lower price for a good in a foreign market than one charges for the same good in a domestic market. This is often referred to as selling at less than "fair value". Under the World Trade Organization (WTO) Agreement, dumping is condemned (but is not prohibited) if it causes or threatens to cause material injury to...
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...economists come to conclusions and the economy of a city, state, and country. Microeconomics is the study of the economic decisions and actions of individual people and companies according to the Merriam-Webster dictionary (Merriam-Webster, 2014). This practice is the study of economics on a small scale where macroeconomics will study the whole system (Merriam-Webster, 2014). Principles and Concepts The simulation provided for an in depth experience into an example of supply and demand in the housing market. GoodLife Management is the only apartment owner in the city of Atlantis, because of this GoodLife has a monopoly in this market. This monopoly allows more control over the pricing structure of the apartment living in Atlantis with little outside influence. Even with a monopoly there are a few things that can enhance or diminish the pricing structure of apartment living. An example given was the current state of the economy which did not provide enough income to fill the housing units with the higher rental rates therefore the rates had to be lowered in order maximize profits. Although the state of the economy as a whole is macroeconomic, the cause forces a microeconomic change in the rental rate (University of Phoenix, 2003). The simulation also creates a supply change by building new apartment complexes, which in turn would drive the price down. This adjustment in price is only temporary as the community is expecting a market shift in demand with the new arrival...
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...PRICING AND PRICING POLICIES PRICING Pricing is the process whereby a business sets the price at which it will sell its products or services. It is a method adopted by a firm to set its selling price. It usually depends on the firm's average costs, and on the customer's perceived value of the product in comparison to his or her perceived value of the competing products. Different pricing methods place varying degree of emphasis on selection, estimation, and evaluation of costs, comparative analysis, and market situation. See also pricing strategy. PRICING POLICIES Pricing policy refers how a company sets the prices of its products and services based on costs, value, demand, and competition Pricing Policies provide the framework and consistency needed by the firm to make reasonable, practicable, and effective pricing decisions. Although policies in any area of management are difficult to develop, firms with a well-established set of pricing policies usually make consistently better pricing decisions than firms without such policies. STEPS IN SETTING A PRICING POLICY 1.) Selecting the Pricing Objective – it is where the company wants to position its product a. Survival b. Maximum Current Profit - estimate the demand and costs associated with alternative prices and choose the price that produces maximum current profit, cash flow, or rate of return on investment. c. Maximize Market Share/ Market Penetration – low price d. Maximum Product Skimming...
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...Europe, the small business sector was the most successful entity of the movement a socialist economy to a market economy. The movement in the privatization process led to auctions of small businesses and the restitution of property in these countries. This resulted in the restoration of some small family businesses. Small businesses, however, came with several issues that made it difficult for other emerging small business to be established. Two factors that made it difficult for entrepreneurs to keep their business running was increasingly higher inflation rates and wage rates. This made it a necessity for many small business owners, especially at first, to have second and third jobs in order to keep the business afloat. Since it was so difficult to keep up with these demands, it forced businesses to operate using borderline illegal practices. It was only through these practices that many small businesses were able to operate with all the regulations and legal procedures that the company had to face. They also needed to avoid the mafia or corrupt officials as it became very difficult to work out a secure contract for lease of property, and the banking system was not equipped to take care of the needs of small businesses. Another area of concern for small businesses was lack of experience. Since most, if not all of their lives in Eastern Europe, people lived in a socialist economy, there was no training of entrepreneurship. To fix this issue, many organizations from the West...
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...poses numerous puzzles. Why is it occurring, and why do people care about it? This paper proposes an explanation for many of these puzzles in terms of the increasing importance of price discrimination. Privacy appears to be declining largely in order to facilitate differential pricing, which offers greater social and economic gains than auctions or shopping agents. The thesis of this paper is that what really motivates commercial organizations (even though they often do not realize it clearly themselves) is the growing incentive to price discriminate, coupled with the increasing ability to price discriminate. It is the same incentive that has led to the airline yield management system, with a complex and constantly changing array of prices. It is also the same incentive that led railroads to invent a variety of price and quality differentiation schemes in the 19th century. Privacy intrusions serve to provide the information that allows sellers to determine buyers’ willingness to pay. They also allow monitoring of usage, to ensure that arbitrage is not used to bypass discriminatory pricing. Economically, price discrimination is usually regarded as desirable, since it often increases the efficiency of the economy. That is why it is frequently promoted by governments, either through explicit mandates or through indirect means. On the other hand, price discrimination often arouses strong opposition from the public. There is no easy resolution to the conflict between sellers’ incentives to...
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...extremely high short-term volatility of real exchange rates with the glacial rate (15 percent per year) at which deviations from PPP seem to die out?’ (Rogoff, 1996, p. 664). To solve the PPP puzzle, numerous explanations arose including the core of this essay, Pricing to Market. The objective of this essay is threefold: (i) to explore and review the concept of Pricing to Market (PTM), (ii) to illustrate the implications of PTM for Purchasing Power Parity, and (iii) to analyse the empirical evidence of PTM. Initially, I will start with an overview of the concept of PTM in the first part of this essay, then go on to interpret the implications of PTM for the PPP hypothesis in the following paragraph and cover the empirical evidence concerning Pricing to Market in the last section. Main body Pricing to Market as a concept was first introduced by Krugman in 1987 to characterise the phenomenon of imported goods’ prices staying the same or even increasing when the domestic currency appreciates. In other words, it implies that producers are capable of price discriminating among different international markets (Knetter, 1989). The fact that price discrimination for certain types of goods arise in the international goods markets may be due to the difficulty or absence of international arbitrage. Particularly, differing national standards (for instance, left-hand-drive cars are not sold in the U.K.) or monopolistic firms’ ability may both impede international goods arbitrage (Sarno and...
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...should be offering. Thompson and Coe (1997) suggested that competitive advantage that is sustainable is acknowledged as a factor that is critical for survival in the turbulent environment of the 1990s. They opined that most organisation strive to exist and at the same time aim to have a market share that is considerable in making a profit, the means to be more marketable is not by selling existing goods or services but by creating a brand name that is distinctive for itself.. However, for us to have a better understanding of the question, I would be examining the UK grocery industry with particular reference to Tesco plc and ALDI GMBH. Rivals organisations try to outperform one another thus ending up competing solely on basis of incremental improvements that is either in cost or quality. Striving to capture attention and retain their customers, the strategies of supermarkets varies between price wars, innovation and loyalty schemes. According to Harvey (2000) the developments in the UK supermarkets of recent are distinctive in retailing in the country hence it is vital in assessing the competition in this market. Furthermore, he suggested that the supermarket in the UK delivers a market place that is different from a simple “basket of goods” with a price that is specific and quality. The concerns of product range, potential innovation and factors that are associated with convenience are all included...
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...discuss a pricing strategy (Penetration or Skimming). Pricing is very important strategic element. The pricing strategies impinge on featuring products, channel decisions, and promotions. The researcher realizes there is no real determine pricing, following a life cycle for developing the pricing of Destini’s Closet product. First, develop market strategy – which the researcher evaluated and conducted a marketing analysis to identify the market segments, target market, SWOT analysis, and the market positioning. Second, marketing mix decisions – the researcher defined the product (Clothing), contacted manufactures for distribution, and decided promotional tactics. Now the researcher is focusing on the cost productions, price of substitute products, and prices offered by the competition. The researcher notices that competitors change their prices often. Case scenario, competitors are always looking for a competitive match, this can be an advantage and a disadvantage for the business. Competitors may strategize a different packaging of their product; this can be good for Destini’s Closet by reducing their price. It’s all up to the customer wants and needs. The demographic crowd the researcher is focusing on would rather price reduction then a new look to a product. What if production price are rising? If production price is rising it’s up to the Destini’s Closet to determine the price increase without turning the customers to their competitors Two commonly known pricing strategies...
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...business tactics and pricing strategies. While reconsidering marketing practices may make good sense, you should not significantly change your pricing. An untimely price reduction can cause great financial stress on a company, sometimes driving them into bankruptcy. When in doubt, don’t turn to price reduction. Cutting prices with the hope that you will attract more business is a surefire way to reduce profitability. Then what is the solution? Conduct a Business Analysis That will help you to develop a clear image of how your business is working, considering the sum of all the constituent parts. After that, assess how your business has been developing and acknowledge areas of possible improvement. Track the success of your improvements over time, adjusting the changes so that they optimize the efficiency of your overall goal. In such a competitive business climate, making just the right changes is crucial to your success. Finally, make certain that your pricing matches the value of your services—not just your cost in providing them. If that means increasing prices, do it. Refine your Marketing The solution to surviving a recession isn’t cutting prices but smarter marketing to your target customers. Determine who you best customers are and research the best way to market your services to them. The most successful companies are the ones that can take advantage of a recession to enlarge their market exposure and attract more business. Pricing Consider new ways of...
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