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Financial and Economic literacy for Managers Assignment PDF

   

Added on  2021-04-21

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Running Head: FINANCIAL AND ECONOMIC LITERACY FOR MANAGERSFinancial and Economic Literacy for ManagersName of the StudentName of the UniversityAuthor note

1FINANCIAL AND ECONOMIC LITERACY FOR MANAGERSTable of ContentsAnswer to question 1..................................................................................................................2Waitrose.................................................................................................................................2Market structure of supermarket chain in UK........................................................................2Growth and Marketing strategy of Waitrose..........................................................................3Answer to question 2..................................................................................................................5Factor affecting demand of housing.......................................................................................5Interest rate.............................................................................................................................6Factors affecting supply of housing.......................................................................................8Bank of England’s action in the housing market...................................................................9Answer to question 3................................................................................................................10Output Performance.............................................................................................................10Labor market performance...................................................................................................13Movement of Price level......................................................................................................14Answer to question 4:...............................................................................................................15Answer to question 5:...............................................................................................................17Answer to A:........................................................................................................................17Answer to B:........................................................................................................................19Answer to C:........................................................................................................................19Reference List:.........................................................................................................................21

2FINANCIAL AND ECONOMIC LITERACY FOR MANAGERSAnswer to question 1Small and Medium sized enterprises provide a great support to UK economy. Theexpansion strategies of SMEs open up new market and create new job opportunities. In orderto grow bigger these companies invest in innovation leading to intense competition in themarketplace. As per 2014 statistics, UK has nearly 5.2 million SMEs. In UK, a wide majorityof business is currently employing less than 10 people, accounted for 33 percent employmentand enjoys a turnover of 19 percent (uk.wsj.com 2018). However, the small and mediumenterprises has accounted a disproportionate growth rate. It is found that 6% of total SMEs inUK experience higher growth rate and responsible for generating fifty percent of new jobsbetween 2002 and 2008 (fsb.org.uk, 2018). The grocery supermarket chain in UK is one ofthe interesting aspect to be discussed. The supermarket chains some large and small retailers. Waitrose Waitrose belongs to the chain of British supermarket structure, forming the divisionof food retailers in Britain. It has nearly 352 branches in United Kingdom. Among thesebranches 30 are convenience shops. Currently Waitrose occupies a market share of 5.1percent in grocery supermarket chain. Market structure of supermarket chain in UK The supermarket structure in UK resembles the feature of an oligopoly market. Anoligopoly market is characterized by the dominance of few large firms in the market (Slomanand Jones 2017). The grocery supermarket in UK is now increasingly dominated by few largesized firm such as Tesco, Sainsbury and ASDA. The concentration has been acceleratedlargely until 2012. Thereafter, two low cost retailers Aldi and Lidle have successfullyexpanded their business. this has reduced the four firm concentration ratio from 75% in 2011to 72.3% in 2016 (ibisworld.co.uk, 2018).

3FINANCIAL AND ECONOMIC LITERACY FOR MANAGERSFigure 1: Grocery market share in UK (Source: bbc.co.uk 2018)Growth and Marketing strategy of Waitrose In order to survive in a concentrated market Waitrose has undertaken a number ofstrategies. The strategies are discussed below Advertising Advertising is one of the key marketing strategies for oligopoly players. Advertiseprovides information to the customers about the unique feature of a product. It is a low cost,time and energy saving way for customer to get knowledge about a product. Advertisinghelps to reduce concentration or monopoly power by offering information regarding new andcompeting goods. Waitrose has successfully increased its market share and stimulate salesgrowth by focusing on advertising and creativity designing. The retail advertising of Waitrosehas two objectives – providing price message tactically and offering a strategic qualitymessage (dandad.org 2018). Waitrose has released a series of advertising on differentplatform like national television, internet and others. As a part of brand promotion thecompany has sponsored England Cricket team from 2013 to 2016. Product differentiation

4FINANCIAL AND ECONOMIC LITERACY FOR MANAGERSProduct differentiation is another important strategy devised by business to increaseits market share. The objective of product differentiation is to make own product differentfrom its rival as much as possible. A differentiated product attracts more attention of thecustomers and thus helps to achieve sales growth. Waitrose has a differentiation strategycovering both the price and quality aspects. Waitrose differentiation strategy focuses onupper market segments and offers a wide range of fresh products with good quality services(accaglobal.com, 2018). Unlike taking a diversification strategy of four big retailers,operation of the company is mainly concentrated on the market of food and drinks. Waitrosemake its stores the most convenient place for customer to have desired product at thecheapest price. The Waitrose customers have low stress regarding quality of product andoften willing to pay premium price. Marketing Mix of Waitrose The term marketing mix refers to the business strategy where business uses acombination of different tactics to achieve the marketing objective for different targetedcustomer group (businessinsider.com 2018). Different factors encourage the company to varyproduct mix. Waitrose use promotional offer pricing varied from stores to store. The different marketing strategy of Waitrose provide the company an importantposition in the grocery supermarket chain and opens up future scope for business expansion. Answer to question 2By definition, housing market indicates a market that deals with demand and supplyof housing in a specific nation or region. The housing market of UK has experienced some

5FINANCIAL AND ECONOMIC LITERACY FOR MANAGERSdramatic changes since 1990s. The ownership trend in the housing market of UK graduallyshifted from private ownership to a continuous rise of public housing offered by localauthorities. There are different factor affecting demand and supply of housing and hence,play an important role in determining housing price. Factor affecting demand of housing Affordability: Affordability is a principle determinant of housing demand. When people’s incomerises that people are able to spend more on property. During economic growth people’sincome increases leading to an increase in housing demand. Figure 2: Housing affordability index in UK (Source: Wilcox and Perry 2014)The above graph depicts that housing price and demand can rise at much faster ratethan income. This suggests that apart from earning there are other factors that significantlyinfluences housing demand. Interest rate Interest rate refers to the cost of mortgage repayment and hence plays an importantrole in determining housing demand. Most of the homeowners in UK has a preference toward

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