Phase Model of Globalization

Phase Model of Globalization The intention of this paper is to give an outline of the stages in the phase model of globalisation. It will talk about each of the four stages and some associated advantages and disadvantages with each. Also this paper will be looking at companies within Australia that represent each of the stages in the phase model. Introduction Globalisation is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. (StateUniversityofNewYork)Globalisation is a defining word of our age and the way in which we live; globalisation affects people, companies, their workforce and consumers. It affects all aspects, not just of the corporate world, but transactional and cultural relationships generally and so affects how we live and how we interact, no matter where we live (Stanley J. Paliwoda 2009). Globalisation has been accelerated by falling trade barriers, the spread of free trade and trade harmonisation in an electronic age, bringing a reduction in the bureaucracy surrounding international trade and increased speed to the way in which communications relay changes anywhere in the world (Stanley J. Paliwoda 2009). There are four stages in the phase model of globalisation they are Export ing, Cooperative contracts, Strategic alliances and Wholly owned affiliates (McWilliams 2010). In the following paper all four stages will be analysed and using Australian companies who operate at each stage the risks and major disadvantages will be identified and outlined. Body With todayà ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¾Ã‚ ¢s more and more globalised world the yearly value of global trade in the form of exports and imports is expected to exceed $12 trillion. In most recent years world trade has consistently grown at a more rapid rate than world productivity (BusinessVictoria 2008). The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country, in summary it means selling domestically produced products to customers in foreign countries (McWilliams 2010) the main risks with exporting are high financial costs, ever increasing trade barriers, and greater political, legal and cultural complexity. An example of an Australian company that uses exporting is the iconic Australian swimwear brand Speedo who export their items to countries such as UK, Japan, France, Italy and Germany (Speedo 2010), also many other well known Australian fashion designers such as Lisa Ho, sass bide and Ksubi (AustralianGovernment 2010 ) have increased the exportation of their designs and lines internationally over the past decade. The next phase in the model is known as cooperative contracts and it comprises of two commonly used types; Licensing and Franchising. Licensing is an agreement in which a domestic company, the licensor, receives royalty payments for allowing another company, the licensee, to produce the licensorà ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¾Ã‚ ¢s product, sell its service or use its brand name in a specified foreign market (McWilliams 2010). The use of licensing in industry can open up gaps for risks to occur, such as the licensor giving up control over the quality of the product or the service sold by the foreign licensee also licensees can eventually become competitors, especially when a licensing agreement includes access to important technology or proprietary knowledge. In Australia Telstra is a main company which is using licensee stores, the Telstra Licensed shops (Telstra 2010) can be located in all major cities and shopping centres. A business or company also has the option of franchising; th is is a collection of networked firms in which the manufacturer or marketer of a product or service, the franchisor, licences the entire business to another person or organisation, the franchisee (McWilliams 2010). Compared to licensing its risks are more numerous; at the end of the franchise term, the franchisor is not obliged to renew the franchise, in which case the business and its goodwill revert to the franchisor. Some franchises have restrictions in place which means you are limited where you may operate and/or promote your business; franchisees generally have to operate the business according to the franchisors operations manual. In Australia we have many well known franchised companies one being The Coffee Club which has 270 stores across Australia, New Zealand and Thailand (Reed 2010)and the popular chain of Healthy Habits which now has 32 stores nationally (Reed 2010) The Strategic alliance phase is an agreement in which companies combine key resources, costs, risk, technology and people (McWilliams 2010). Strategic alliances are becoming more and more prominent in the global economy, more than 20,000 corporate alliances have been formed worldwide over the past two years, and the number of alliances in the USA has grown by 25 percent each year since 1987 (Elmuti and Kathawala 2001). There are four types of strategic alliances; joint ventures, equity strategic alliance, non-equity strategic alliance, and global strategic alliances. The most common form of strategic alliance is joint ventures which involve two or more companies or individuals in a partnership for a particular purpose (Bambi Faivre Walters 2008-2010). The more valuable the complementary assets held by a local firm, the more likely a foreign firm will choose a joint venture as a means by which to enter a host market (Chiao, Lo et al. 2006). Some major disadvantages with this stage are ; the overcoming of language and cultural barriers, clash of egos and company cultures, dealing with conflicting objectives, strategies, corporate values, and ethical standards and the time consuming for managers in terms of communication, trust-building, and coordination costs (Ellay 2009). A recent joint venture was the merger of Vodaphone and 3 mobile who now fall under the joint company of VHA. VHA markets its products and services under the Vodafone brand, but retains exclusive rights to use the 3 brand in Australia (Gedda 2009) Wholly owned affiliates is the final phase in the model, these companies are foreign offices, facilities and manufacturing plants that are 100% owned by the parent company (McWilliams 2010). There is a distinct primary advantage to this which is that the parent company receives all of the profits and has complete control over the foreign facilities, but the biggest disadvantage to the use of this phase in business is the expense of building new operations or buying existing businesses, this is phase is also commonly referred to as build or buy. In situations of non-firm-specific assets, joint ventures are superior to wholly-owned subsidiaries, which are highly exposed to environmental uncertainty. In situations involving firm-specific assets, wholly-owned subsidiaries may reduce the risks of delay and opportunistic behaviour by partners in uncertain environment (Chiao, Lo et al. 2006). Mitsui EP Australia Pty Ltd (MEPAU) is an example of Australian company that is wholly owned affili ates. It is a 100% affiliated company of Mitsui Co., Ltd and Mitsuià ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¾Ã‚ ¢s main investments are largely in the Australian and New Zealand energy sector (Mitsui 2010). While the payoff can be enormous if wholly owned affiliates succeed, the losses can be immense if they fail, because the parent company assumes all of the risk (McWilliams 2010) Conclusion In summary, all of the four stages in the phase model of globalisation have immense impact on how businesses and companies evolve through time. Some businesses may choose not to follow the phase model step by step, they can opt to skip stages on the way; there are also a majority of businesses choosing not to follow this phase model at all (McWilliams 2010). At first, globalisation was about taking advantage of minor expenses in offshore destinations, but now thriving globalisers recognise the additional major advantages to this and are taking on these advantages, where unsuccessful organisations are not. Each stage or phase of the model inherent its own levels of risks; but to make sure there is successful implementation of these phases requires conscientious planning, and also requires continuing management, and strong dedication from the business and organisation leaders.

Boston Beerâ€Is Greater Growth Possible? Essay

1. Have you ever tried one of the Boston Beer brews? If so, how did you like the taste? Was it worth the higher price? I haven’t tried any one of the Boston Beer brews, so I’m not sure whether I will like its taste. I searched the key word â€Å"the Boston Beer† on the Internet, I found that there are three distinct characteristics of this brand’s beers: strong-flavor, unique package and high prices. Although a lot of beer aficionados will pay for the high price, as an ordinary beer customer, I don’t think it deserve the higher price. I have two reasons: Firstly, it is difficult for ordinary beer customers to distinguish which kind of beer have a good quality and which kind of beer haven’t. Not to mention, which brewery use premium ingredients to brew their beer. In most of time, we choose to buy a brand of beer just because its advertisement successfully leave its name in our mind or the recommendation from our friends. On the other hand, we usually drink beer with our friends at home party. So our main objective is to have fun not enjoy tasting high-quality beers. Also, its unique package does not make sense to us. No one will collect them, so the simpler the better. We don’t want to pay the bill for its beautiful package. To pay the same money, we prefer to have more quantity to ensure everyone can have enough beer than ensure everyone can have high-quality beer. On this point, the Boston Beer will lose a big part of beer customers because of its high-price strategy. In summary, the Boston Beer products do not deserve such a high price because their value in quality and package can’t be recognized by the general public. 2. The investment community evidently thought Boston Beer had great growth potential to have bid up the initial price so quickly. Why do you suppose so many fell into this trap? Or was Jim Koch a poor executive in not bringing Boston Beer up to their expectations? So many people fell into this trap because they overestimated the potential for development of the Boston Beer. But in the fact, Boston Beer’s potential is limited. That the growth potential is sorely limited due to two factors: a. Ease of entry into the industry, which encourages a host of competitors. This turned out to be especially true with the influx of microbrewers, to 3,000 in just a few years. b. Finite potential in demand. Demand for specialty beer, while at  first robust and rising, was certainly not going to take over the mainstream beer market. Given the rush to microbreweries in an environment of limited demand, the aspirations of Jim Koch to be a dominant force in the brewing industry had to be curbe d. He could still be a profitable firm and do well in his niche, but he would never be a challenge beyond that. Perhaps that is enough for most entrepreneurs. But this is far unable to meet the high expectations of the people of Boston Beer. On the contrary, Jim Koch is a really good market executive. He used excellent marketing strategy when Boston Beer announced its initial public stock offering (IPO) of shares. â€Å"The company put clip-and-mail coupons on Samuel Adams six-packs and other beer packages. These offered customers a chance to buy 33 shares of stock at a maximum price of $15, or $495 total.† In marketing, promotion is always a good way for the company to raise sales. Similarly, the Boston Beer use this way to arouse wide public concern, and give the customers the illusion of buying is earning. â€Å"Only one subscription was allowed per customer,and these were honored on a first-come, first-served basis.† People always curious for those limited things, for fear of miss it even in one-second hesitation. By seizing this customers’ psychology, the first-come, first-served basis contributed a lot to bidding up Boston Beer’s initial price and caused so many people fell into this trap. Just because this this two marketing promotion tools, the Boston Beer’s stock was oversubscribed within a short period of time. 3. â€Å"The myriad specialty beers are but a fad. People will quickly tire of an expensive, strong-flavored beer. Much of it is just a gimmick.† Discuss. As far as I am concerned, the myriad specialty beers are not just a gimmick, although when too much kind of microbrews appear in the market will make the customer feel difficult to choose any kind of them and sometimes they will feel tired. I want to illustrate them from the following two aspects: a. The microbrews have their own specific market, those who willing to pay for the high price for the strong-flavored or the unique package. For example, a can of Sprite is sold in the supermarket for about 4 dime, but it is sold for 2 dollar in the restaurant with a glass of ice and a slice of lemon. Is a glass of ice and a slice of lemon value 1.6 dollar? Without a doubt, the answer is no. Why will so many people pay for it? Because it is convenient. Everything has its own market has the reason to exist. b. No matter the other microbrew is just a gimmick, the Boston Beer is not. To a certain extent, its high level represents its high quality. Samuel Adams was not only voted the Best Beer in America four times at the annual Great American Beer Festival, but also received six gold medals in blind tastings. Skimming away its price, just concern the quality, this is enough to explain the Boston Beer has the high quality. Because of its high quality, Boston Beer still keep the leading position and continue to profit in the fierce industry competition. 4. What problems do you see retailers facing with the burgeoning number of different beers today? What might be the implications of this? Nowadays, a number of various beer brands suddenly appear on the horizon so that the competitive grow. Retailers are looking for marketing support and Boston Beer has the best quality and marketing. Lots of the non-traditional beers are still lacking the commercial support from the breweries where they come from and are left to retailers for a smaller group of consumers that may know about them or are curious for new options coming from places with microbrewery tradition like Portland, Colorado, etc. To be successful, retailers must do more deep researches to find out consumers needs and meet consumers’ expectation. In addition, retailers have to consider how many beer brands they would like to sell and which kinds of beers are popular in general market. Our suggestion is that retailers must focus on selling several kinds of beers instead of selling all kinds of beers. Maybe retailers think that if they can sell all kind of beers to expand the market but it will result in an increase in the logistic cost and a decrease in the quantity. To develop the market, retailers need to use efficient marketing method to promote their products. For example, retailers can provide the discount for consumers once two or three months and combine beers and other goods to sell because consumers always want to save some coin and get the same product with cheaper price. 5. Playing the devil’s advocate (one who takes an opposing view for the sake of argument prices in the world for your beer. The manufactures cost might be the same as traditional beers as quality doesn’t necessarily translates  to higher costs. And it’s been seen in several other commercial cases that sometimes the higher price in a product is just a socio-economical status differentiator which makes the consumer that can afford it feel special even when the real support of quality is not completely proven or being tasted. In addition, setting the price is an important step before developing the product into the market because the price is one of factors, which will effect how many consumers will buy it. If the price is too high, some of consumers can’t afford to buy it. Maybe they are willing to try or use the product but they don’t have enough money to re-buy. Therefore, consumers have many choices because there are a lot of substitute products in the market. In the other words, the high price may decrease the selling and increase the risks in the ownership of inventory, which will become obsoleted or out of fresh. In general aspect, the luxury product is equal to the social status. If the price is too high to afford, it will downsize of the potential market. Even thought you employ the best strategy to promote the product, it doesn’t increase in quantity and increase the profit. In addition, not everyone are good at distinguish the differentiation between Boston Beer and other beers so that they won’t insist to buy the beer with higher price. For example, Mary wants to hold a birthday party and invite the whole freshman to participate. So she has to buy a lot of food, beverage and beers. Because of limited budget, she can’t afford the high price of beer even though the tasty is good. 6. We saw the detection of a problem with the freshness of a beer at a restaurant by Jim Koch himself. How can Boston Beer prevent such incidents from happening again? Can such distributor negligence or shortsighted actions be totally prevented by Boston Beer? In products that maintain a higher price based on quality that quality control investment on the product should go all the way to the retailers. There are several ways that Jim Koch can prevent the bad quality. First, Jim Koch must re-check every step from manufacture to package. The most important part is container because beer is a kind of sensitive product, which needs to store carefully. Secondly, Boston Beer needs to build up a strong relationship with their retailers and distributors. A good partnership also can prevent the same problem happen again because Boston Beer and their retailers or distributors understand  that they are a team, which share the same goals, reputation, and benefits. Thirdly, if retailers don’t know how to store those beers in warehouse or keep the beers in fresh, Jim Koch must send some professional employees or salespeople to educate those retailers and teach them how to keep the beer in fresh. Finally, Jim Koch has to evaluate or visit retailers regularly. The methods above are very useful to avoid the bad quality problem happen again. 7. Do you think Boston Beer can continue to compete effectively against the giant brewers who are moving with their infinitely greater resources into the specialty beer market with their own microbrews? Why or why not? In our group opinion, Boston Beer can continue to compete effectively against the giant brewers who are moving with their infinitely greater resources into the specialty beer market with their own microbrews. There are three reasons to explain it. First, Boston beer has built up a good brand image. When other giant brewers into the specialty beer market with their microbrews, Boston beer has been develop their microbrews a long time. It means the brand of Boston beer has been recognized as one of the industry’s most famous microbrews. It already has relative stable customer group. The second reason is high quality and flavor of beer. Jim Koch gets a recipe from his great-great-grandfather, Louis Koch. This recipe is more full-bodied than such beers as Budweiser or Miller. Jim Koch also uses best material and longer time in Boston beer so that the quality and flavor is better than other brands of beer. Because the cost of Boston beer is expensive, the sale price must expensive than other beers. In many people’s mind, high price means high quality. People cannot buy expensive car but everyone can buy an expensive beer. When people taste Boston beer, they will be attracted by its quality and flavor. Although the price of Boston beer is higher than giant brewers, it has attracting some relative stable customer groups though the high quality and flavor of Boston beer. This is offer benefits for Boston beer continued growth. Boston Beer can keep a sales force and relative to competitors so that it can provide a higher level of quality service than the larger mass brewers. Consequently, Boston beer has more compe titive edge by their quality product and sale service quality in the beer market. The last reason is Boston beer has a good operation principle. Initial period,  Boston beer didn’t have enough money, so it made contracts with other brewery: use Jim Koch’s recipe to produce beer. Boston beer use this way to save the cost of plan and equipment to develop its marketing, such as advertise. If the brewery cannot produce high standards’ beer, they will find another brewery. It not only save money but also ensure the quality and flavor of beer. Therefore, Boston Beer can compete effectively with even the largest beer brand that is moving with their infinitely greater resources into the specialty beer market with their own microbrews. In contrast with giant brewers, Boston Beer has built up its brand in the microbrews market. It still keeps quality and flavor not lower the price and quality. The customers will be used to think Boston Beers first and in this way, the sale force will be strengthened. 8. In 1998, Boston Beer produced more than two dozen styles of beer. Then a few years later it was down to just a few. Now it’s up to more than 21 again. Do you see any problems with this? Our group fined some problems with this question. First, Boston beer wants produce to attract consumer. However, everyone’s taste is different; a single taste of beer can’t satisfy the needs of all customers. So, Boston beer offered more than two dozen styles of beer for consumers’ choices in 1998. This way can attract many customers. But, it also brings a lot of problems. Boston beer must spend more cost in the propaganda of different kinds of beer. When Boston beer company produce a new style of beer, they must do a process of marketing, like marketing research, product development, pricing and advertising, to find potential consumers and affect them to buy the new product. It needs a lot of money but the new products may not meet customer. It takes stress for Boston Beer Company. Anther problem which Boston beer offers more than two dozen styles of beer is Boston beer will lose some consumers. Like in the article, an industry analyst said:† After people got inundated with so many choices . . . they kind of stepped back.† Then a few years later, Boston Beer Company find their market share is small—a market that represented just 3 percent of the U.S. Beer Market. Thus, Boston beer Company was down to a few styles of beer, concentrating only on best sellers: the flagship lager and four seasonal brews. This is a very good strategy decision. Boston Beer through calculate from the data and find out most of the consumers prefer which taste and they can adjust marketing strategy. This decision can reduce a lot of unnecessary spending and ensure  the interests. Meanwhile, Boston Beer Company also ensures the main products market share in all the microbrews market. Although the decision that Boston Beer Company cut their beer styles to just a few cause Boston beer lost some consumer who like other styles of beer, it brings a lot of advancing for the development of the Boston Beer Company in the overall strategy. In recent years, Boston Beer Company has development quickly. Even in all beer industry recession, Boston Beer still maintains good performance. Its beer because of high quality and full-bodied flavor won many awards in the beer game. With development of Boston Beer Company, it has become an able company. Its main products are stability, and the customers’ market share close to saturation in micro brew market. In this case, Boston Beer Company to seek new breakthroughs will produce new products. Now, it’s up to their beer more than 21 types again. But, this decision may cause some problems. First, the demand of microbrews is finite. Too many types of beer choices will divide up the main of Boston beer’s market share. Second, in recent years, microbrew competitors has increased dramatically, Boston beer produce many kinds of beer will distract the attention of the main products, to reduce the main product competitiveness. Third, the introduction of new products in Boston beer is too much at the same time. This is confusing the choices of customers. If Boston beer introduces only three or four styles new beer, consumer can choose one or more than one styles beer to taste. However, Boston beer introduces 21 styles beer, consumer don’t know which one is better and most consumers can’t buy all these new styles beer because the price of Boston beer is expensive. The last problem of this decision is high risk. Every new product into market must have risk and the introduction of new products need a lot of cost.. Boston Beer Company should introduce a few styles beer one time so that we can know the customers to the new product satisfaction as well as the desire to buy. If customers are satisfied with the new products, Boston Beer Company will continue to launch other new products; If customers are not satisfied, the company can find the reasons of customers are not satisfied, and then eliminate these problems put other new products. When Boston Beer Company launches it’s all the new products at short time, the cos t of this way and risk will higher than only introduce a few styles beer. Therefore, in different period Boston Beer Company increase or decrease the types of beer will cause some benefits but  also brings a lot of harm for its development.

A Lesson Before Dying: an Examination of a Prodigious Storyteller Essay

A good novel entertains the reader. An excellent novel entertains and enlightens the reader. Set in a Cajun community in the late 1940’s, A Lesson Before Dying is a heart-warming tale of injustice, acceptance and redemption. A Lesson Before Dying by Earnest J. Gaines is an excellent novel. Not only does Gaines inform the reader, he entertains will his effective storytelling. His use of symbolism, voice and stylistic devices keeps the reader enticed to the very last page. One way Gaines is an effective storyteller is his use of symbolism. The first symbol to present itself in A Lesson Before Dying is the hog. During trial for robbery and first degree murder, Jefferson’s attorney attempts to get him off by dehumanizing him and denouncing his intelligence, claiming he is incapable of murder because he doesn’t have a â€Å"modicum of intelligence† (Gaines 7). He even goes so far as to compare Jefferson to a hog: â€Å"Why, I would just as soon put a hog in th e electric chair as this† (Gaines 8). This statement drives the central conflict. The hog, a filthy animal, represents the way the whites treated and regarded the blacks; as dirty, unintelligent and inferior animals, whose sole purpose was to work for them. The second symbol to appear in the novel is food. In A Lesson Before Dying, Tante Lou uses food as a means of affection. When Grant tells her he is going into town to eat, he says â€Å"Nothing could have hurt her more when I said I was not going to eat her food† (Gaines 24). Miss Emma brings Jefferson his favourite foods while in prison, to try and comfort him and show him he is loved. When Jefferson refuses to eat, Miss Emma takes it straight to heart and is greatly distressed. Grant even tells Jefferson to eat for Miss Emma, to show that he loves her. In addition to symbolizing love, food also symbolizes Jefferson’s humanity in the novel. Jefferson, taking being called a hog as a great emotional blow, refuses to eat, claiming â€Å"That’s for youmans† (Gaines 83). It is only when Jefferson reconnects with his humanity that he agrees to eat. The final symbol in A Lesson Before Dying is the notebook. After many attempts to reach Jefferson—from Grant, Miss Emma and Reverend Amborse, Grant gives him a notebook to write his thoughts in. In this notebook, Jefferson reflects upon life and death. He writes to Grant about all the injustices he has faced—saying â€Å"it look like the lord just work for wite folks† (Gaines 227) and the his impending fate. The notebook represents Jefferson’s acceptance of his unjust life and his newfound sense of self-worth. In addition, the notebook also shows the bond which formed between Grant and Jefferson. By writing to Grant, he finally accepted Grant’s guidance and showed that Grant made a difference in his short life. As seen through these examples, Gaines uses many symbols to effectively tell his story. The second reason Gaines is an effective story-teller, is his utilization of voice. Most of a Lesson Before Dying is conveyed through stream of consciousness. Narrated by Grant Wiggins, much of the novel is dedicated to Grant’s internal monologue: â€Å"What am I doing? Am I reaching them at all? They are acting exactly as the old men did earlier. They are fifty year younger, maybe more, but doing the same thing those old men who never attended school a day in their lives. Is it just a vicious circle? Am I doing anything?† (Gaines 62) Another way Gaines utilizes voice is through his use of Cajun dialect. Rather than having the dialogue written in proper English form, Gaines presents it exactly how the characters speak: â€Å"I didn’t raise no hog, and I don’t want no hog to go set in that chair. I want a man to set in that chair, Mr. Henri† (Gaines 20). The final form of voice used is epistolary voice. All of Chapter 29 is told through Jefferson’s diary, directed to Grant, to convey Jefferson’s last days on earth. For these reasons, Gaines’ is an effective storyteller because he uses eclectic and creative voice techniques to give the novel a feeling authenticity. The final technique Grant uses to effectively tell the story of A Lesson Before Dying, is stylistic devices. The first device used is repetition. For example, the first time Grant goes to visit Jefferson he remarks â€Å"You know what I’m talking about, don’t you? his eyes said. They were big brown eyes, the whites too reddish† (Gaines 73) and then, he again says â€Å"His eyes mocked me. They were big brown eyes, the whites too reddish† (Gaines 74). Another device used is charactonym. The character Paul is a perfect example of Gaines’ use of charactonym. Being one of the first white men in the story to accept the black people, it could be said that he is so named after Paul the Apostle, who â€Å"was one of the most influential early Christian missionaries† (Livingstone, and Cross 1840). The final stylistic device used paradox. For example, when Grant describes Jefferson’s trial, he says â€Å"I was not there, yet I was there† (Gaines 1). All in all, Gaines uses many efficient stylistic devices to tell his story in an effective manner. Gaines’ ability to effectively tell a story—through symbolism, voice and other stylistic devices, has created a highly stimulating and moving read. A Lesson Before Dying is a emotional and enlightening tale that is bound to touch all those who read it. Works Cited Gaines, Ernest J. A Lesson Before Dying. New York: Random House, 1994. Livingstone, E. A., and F.L. Cross. The Oxford Dictionary of the Christian Church. 3rd ed, Rev. Oxford, England: Oxford University Press, 2005. Print.

Mba 640 Managerial Economics - 1427 Words

MBA 640 (Summer IS 2010) MANAGERIAL ECONOMICS EXAM #1 STUDENT NAME: Exam is open book and open material. 1. Explain the interaction of Managerial Economics with other business disciplines, giving specific examples. Managerial economics has been defined by conventional theorists as a science that is all about how people make choices After you’ve defined managerial economics and it’s relationship to its economic theory. Managerial economics will interact with each of these business’s disciplines at some point or another; demand, marketing, finance, accounting, management science and strategy. An example of one of the disciplines (demand or price elasticity): Ford and Honda cater to the subcompact segment (marketing†¦show more content†¦A change in demand means that the amount consumers are willing and able to buy changes at each and every price. This affects your supply demands. When demand is high the price becomes low and vice/versa. 6. Define market equilibrium and briefly explain how knowledge of this factor can facilitate the organizational decision making process. Market equilibrium occurs where quantity supplied equals quantity demanded. An increase of supply or overproduction will facilitate a price decrease and the number of quantity produced to rise. A decrease of supply affects the equilibrium price to rise and the quantity to fall. When supply increases and demand remains constant, price falls and quantity sold rises. A decrease in supply and the demand remains constant, causes price to rise and quantity sold to fall. This knowledge of equilibrium/disequilibrium can help an organization determine marketing decisions. Continue production, price change, or get rid of this market. 7. How does the impact of supply and demand influence the Pricing of goods and services? 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