Business Economics

Introduction

Competition in many markets appears to be entering a new phase in which pricing strategies are considered but product quality and performance are becoming more important to customers than price. In such markets, the effective management of the development process is the essence of the economic profits the firm can earn. Consumption and savings and technology, shifting and stability, consumers tend to buy more goods and avail more services because of the satisfaction that it can give. However, the simulation illustrates, economic movement in accordance to the behaviour of companies and factors that these companies consider in order to gain more profit. Price setting, innovation and advertising campaign could affect the business and also the economy.

The Core Ethical Business Economical Practices

In terms of core ethical business economical practices, businesses are developing to suffice the need of the society. Consumers want to avail more products/services as the prices decreases but the sellers/businesses will be willing to offer more as the price increase. The interaction between consumers and businesses creates equilibrium price and quantity. As such market is the end product. Changes in the quantity demand and supply are solely attributed to change in price only. In the business market, there is shifting of demand and supply curve when there is already change in supply and demand. This means that the change is no longer attributed to the change in price.

On the other hand, the rapid growth of technological advancement in the society has brought people ease in all the things that they do. Part of this technological advancement is the emergence of the innovative activities for each and every organisation. Actually, “technological progress reflects to the development of new products, improvements in existing products, and the creation of new machinery and production processes that simulates investment” (McConnell & Brue 2004;p. 162). Evidence of innovation is spread thinly in the business population, as most profess that innovation brought out excellent performance for the company in terms of profit and resource maximisation. With this consideration and as part of core ethical business economical practices, appropriate pricing strategies and non-pricing strategies should be considered by business for the sake of their consumers.

Understanding Business Environment

Our environment is continuously changing and factors such as consumption and savings (McConnell & Brue 2004; p. 156) must be considered in the development of new products. Basically, the emergence and development of the products of businesses in the market is one of the innovations needed in the current era. Actually, firms with similar products are competing to achieve above normal return, but being monopoly is not the only way to achieve it. Firms can differentiate themselves with others through innovation: competing to be different. Although the innovation itself maybe profitable, the innovating firm itself may not profit from it. Therefore it is important to establish complementary assets alongside firm’s innovative capability to capitalise majority of the gain. Let as assume that a certain business is a pure monopoly but even though they are not the sole company in this type of business they still have the power to control the market because of the extensive use of their products. It seems that the consumers have no alternative options, it’s either to take it or leave it. Hence, neither special advertisement nor promotion is needed to entice the consumers to patronize their products. The company actually has the power to control their prices, they are considered as price markers or price setters, there is only limited seller (contrary with pure competition with a number of sellers).

Within the market place, one of the most important things to consider is to establish a strategy that will be useful for different activities of the organisation and enhance the value of the business as a whole. Part of the changes brought by the competition of these industries globally are the new economics, new market structure, new marketing strategy as well as the new structures of each and every industry within this field. In line with this, more and more organisations are trying to impose and implement different innovative activities that will further make their business more competent and to have a competitive position in the market place.

Social Economical Influences on the Market

It is very important to emphasize that a business procedures and plans should also consists of consumers wants and needs and not only about businesses profit generation (McConnell & Brue 2004;p. 161). In order to hold on to being a market-oriented company and in consideration to the social economical influences on the market, a business should undertake marketing investigation to gain a thorough knowledge of the market segments that it is interested in going into. Through this, areas of unsatisfied consumers’ wants and needs will surface as well.

Thus, as for non-pricing strategy, marketing communication is also important for the company to generate profits and secure their earnings from their products in accordance to their company standing. The company’s objective to differentiate itself from other rival companies as the they provides costumers whatever they desire, on time, at the lowest possible price, and with the highest quality. The company should strive to increase costumer loyalty and satisfaction.

Reference

McConnell, C.R., & Brue, S.L. (2004). Economics: Principles, Problems, and Policies. New York: The McGraw-Hill Companies.