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FELM4026 : Financial and Economic Literacy

Added on - 08 May 2020

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Financial1Financial and Economic Literacy for Managers
Financial21.Amazon.com is the widest online book store and giving a huge competition to all its competitors’worldwide. But, it can be analyzed that in spite of its growth in a tremendous way theorganization has not recorded net profits till the year 2002 and also the profit was very small interms of the sales made by the organization. So, it can be analyzed that market share does not leadtowards profitability of the organization. The manner in which the industry is carrying out itsbusiness will be helpful in determining market for the industry i.e. perfectly competitive ormonopolistic. These markets will help the organization to attain profits. This theory is termed asparadigm of Structure- conduct-performance. The structure of the organization helps indetermining the behavior of the organizations in a particular industry and this will help inexamine the profitability that can be attained by the organization in that particular industry(Wangand Campbell, 2010).It can be analyzed that the organization which are carrying its operations in a perfectlycompetitive market are not capable of charging the prices more than the price prevailing in themarket. Price can be put down by the competitors in such market equal to the marginal cost. Theonly way to earn profits in such market is to make differentiation either in services or products.The differentiation will help the organization to earn the profits. If the organization willsuccessfully achieve the differentiation than the firm will be able to have monopoly and thus theorganization can charged price according to it as there will be no competitors which can affect theprice. The market share of the organization depends upon the concentration of differentorganizations in the market and the dominance of the firms in the market. With the help ofconcept of structure conduct performances paradigm the organization make an analysis of themarkets which are profitable for it and thus this helps the organization to earn more revenue incomparison to its competitors.With the help of globalization Amazon earned about $107 billion sales in the year 2015 and incomparison to 2103 the company earns revenue double to its competitors. Amazon has capturedonline market around 46% and the share of the company grows at a faster pace with the help of
Financial3globalization. The company also expands its business lines at a global level including auctionhouse, book publisher, and manufacturer of hardware and a wide network of logistic. Thecompany has double its sales on a yearly basis with the help of concept of globalization(Moloney, 2010). Adoption of the structure-conduct-performance paradigm help the organizationto create entry barriers and use of control over data and the bargaining powers has also beenincreased.It can be analyzed that the concern of structures are very important in relation to the onlinemarketing as price plays a very important role. The business organization of Amazon is alsodiscussed. Amazon has made its dominance in the online platform and invests all its profits in anaggressive basis in the organization again. This strategy of the organization helps it in standingahead of the competitors. The premise of the Amazon is to make a business model which helpsthe company to grow. This approach will help the organization to weigh off the other competitors.Amazon is focusing on being market leader and provides its various services to customers likeAmazon prime where delivery is being made in 1 to 2 days. With the help of concept ofglobalization, the company has made worldwide customers and many of the customers chooseAmazon over its competitors around the world. The organization enables to make the businessstrategies in terms of globalization in order to attract more customers(Whitmarsh and O'Neill,2010).2.The UK is based on the market and operates under the institutional and the framework of thepolicy carried in the country. The statement made by the department of environment and ruralaffairs shows the concept of demand and supply in the country. The yearly indicator for outputhas decreased 8.4% as compared to year 2014. The yearly index for inputs has decreased by 4.8%in comparison to year 2014. The potency of the pound in comparison to the euro and also dollarprice in US has impacted on the index of the price in the world wide market and has impacted onthe prices in UK. In the year 2015, the pound has made its strength against the euro and the dollarprice in US which made the fall in price in the year 2015. The yearly crop product index was
Financial4recorded as 5.8% less in comparison to year 2104 because of the decreased prices for crops andcereals(Lennartz et. al., 2012)The area of wheat has made a fall by 5.4% and oats has made a fall by 4.4% and the barley areahas shown its increment by 1.9%. The macroeconomic concept in UK can be analyzed from thearea that pulses have made an increase in the year 2015 in order to fulfill the demand of the year2015. The agriculture of peas has been increased according to the demand of the country. Thesector of ornamental in the country has showed a downfall of 1.5% and in the sector of retailstrong demand was stimulated which was fixed by the season production estimates. There werepoor weather conditions in the country discourage the growth of crop. Lower prices lead towards14% in gross value. UK Department for Environment and Rural Affairs has the main purpose isto find out the potential of the country towards food and agriculture and animals and otherhazards by maintaining elasticity of supply and demand. This will help in maintaining a healthyenvironment and thus excellent delivery of value for the money in the country.This statement shows the concept of demand and supply. The measure of the changes in thequantity demanded with the changers in the prices of the product is termed as the elasticity ofdemand. This can be calculated by dividing the change in the quantity with the change in theprice. There are various determinants which affect the same like inflation in the country hasaffected the price of potatoes in the country. Price elasticity helps in making an estimation of thechanges in the price of the product over a period of time. Price elasticity can be determinedthrough the changes in prices on the basis of the total revenue on a particular product with makingconsideration on the changes in the government policy. From this particular statement it can beanalyzed that the supply was restricted in order to maintain the stability in the country(Lahti,2014). The potato index rises 3.2% between the months in March and February 2017 as comparedto the increase in month of March and February 2016.3.Competition policy implemented by the UK government in order to make the markets a betterplace to work and in order to increase competition so that there will be economic prosperity in thecountry. With the implementation of competition policy, the government ensures that there will
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