Financial and Economic Literacy for Managers - Assignment

Financial and economic
literacy for managers

Table of Contents
INTRODUCTION...........................................................................................................................1
QUESTION 1...................................................................................................................................1
Application of Structured conduct performance, growth strategy and globalisation of Toyota
Car...............................................................................................................................................1
QUESTION 2...................................................................................................................................2
Application of different micro economics concepts related with a product..............................2
QUESTION 3...................................................................................................................................4
Application of monetary and fiscal policies of UK government................................................4
QUESTION 4...................................................................................................................................5
Application of different concepts for obtaining funds for business operations........................5
QUESTION 5...................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
An organisation's main aim is to expansion and growth with attaining hike in its
profitability. This motive can be achieved by an enterprise through application various principles
of business and financial economics in entity. In the present report growth strategy of Toyota
Car and its globalisation is presented. With this economics effect on a business related with
demand, supply and consumer behaviour is discussed through hypothetical example. The effect
of monetary and fiscal decision of UK government on economy development of nation is given
in this report. T financial decision taken by a business with respect to how to generate the funds
for business operations and how to allocate them with investment of profits. The practical
approach of financial economy of a business is presented through calculation of financial ratios,
present value and net present value of various projects.
QUESTION 1
Application of Structured conduct performance, growth strategy and globalisation of Toyota
Car
It is very important for Toyota company to consider all the aspects which is required for
their successful business operation in industry. For this they have to study their structure-
conduct-performance paradigm, growth strategy and globalization effect on their company
(Talpur and et.al., 2016). These factors are explained below:
Structure-Conduct-Performance Paradigm
Structure, Conduct and Performance paradigm (SCP) is generally used by the company
as an analytical framework which is very helpful in identifying their market structure, market
conduct and market performance. In structure paradigm, it includes the behavior of the seller or
buyer in industry. It can also be affected by the product and technology which is available in the
market which can affect their business activity. In conduct paradigm, it includes factors in which
both buyer and seller behave with each other (Structure, conduct, performance paradigm, 2017).
It can be managed by the company by implementing various strategies which can help them in
improving the relationship between them. In performance paradigm, it is calculated by
comparing their results with other companies that are competing in the same industry. This
process will help them in improving their overall performance.
Growth Strategies
1

It is very important for Toyota company to have effective growth strategies which can
help them in improving their business. The main strategy of this company is the implementation
of Toyota’s generic strategy and intensive growth strategies which helped them in competing in
the global market. Apart from this they have also implemented innovation in their products and
service which helped in attracting more customers. There generic strategy is a combination of
both cost leadership and differentiation. These growth strategies has played an important role in
the increasing their production rate (Toyota’s Generic Strategy & Intensive Growth Strategies,
2017). With cost leadership strategy they set their prices at minimum cost which can be easily
affordable by their customers as compared to their competitors. From differentiation strategy
they try to provide unique and different products to increase their competitive advantages.
Globalization Impact
Globalization has a huge impact on the automobile industry. Toyota company is also
affected with this process. This process has helped Toyota company to expand their business in
different countries as it gives them liberty to trade. As it is the largest car and vehicle
manufacturing company, it becomes difficult for them to cope up with globalization. They have
highly improved their tools and technology which is being used in the manufacturing process of
cars and vehicles (Ralston and et.al., 2015). There is a huge advantage of this process as well, as
it gives Toyota to increase their trade between countries which eventually increased their capital.
There a greater ease in the transportation of their goods and services across nation. Due to
globalization there is a huge increase in the competition as well. Customer service and
satisfaction rate has also impacted on their business. As part of its globalization efforts, the
company focused more on increasing the production of auto mobiles.
QUESTION 2
Application of different micro economics concepts related with a product
Here example of a manufacturing company is taken which is engaged in production of
Air conditioners. The name of the company is taken as Air cold P Ltd.
Demand: demand in micro economics concepts means willingness and desire of a
consumer to purchase a particular product by paying the price of that good. When all factors of
economic condition are constant an increase in price will reduce the demand and a decrease in
price will inflate demand of a product. Demand for a product is also determined by certain other
factors such as seasonal requirement, essentiality of product, tastes and preferences of consumer,
2