Management Economics: Factors Influencing Demand and Price Elasticity

Management Economics

INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Describe the business and its main products & services.........................................................1
2. Identify the factors which influences the demand of goods & services..................................4
3. Identify the factors which influence the price of elasticity......................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
In order to make better and more productive actions, managers should have to done effective
planning. Management economics is defined as the mechanism for integrating various economic
values inside the business operation and service (Brouwer and van der Heide, 2012). On the
other side, management economics is related to the application of economic principles and
critical thinking to rational decision-making issues. The main task is to allow the more efficient
use of available resources such as manpower, capital and property. It has gained attention among
companies in the current period as it encourages the maintenance of comprehensive financial
statements in order to meet realistic sales goals, devise successful strategies and set appropriate
prices.
For a deeper understanding of Apple Inc, company implement several economic principles.
It contains the other economic factors that are discussed, such as demand and supply factors, cost
estimates, pricing, and market policies. Therefore, factors are being established that can
influence demand & supply elasticity in the chosen business context.
MAIN BODY
1. Describe the business and its main products & services
Apple Inc. is an international US based Technology Company which established in
Cupertino, California, United States. This organization established by the Steve Jobs, Ronald
Wayne and Steve Wozniak in 1976. Apple Inc. is recognized for the innovative technologies of
Smartphone, mobile phones, electronic devices etc (Callan and Thomas, 2013). The company
introduced Apple brand in July 1976 that was a standard chipset machine and especially post-
assembled comparison with other machines at the period. The company has a variety of products
like iPhone, iPods, wireless earphones, iPad laptops, smart TVs and fitness watches making it the
leading Smartphone brand in the world. Apple Company’s products are modernized by
understanding the needs and preferences of consumers and technological development, leading
to customer satisfaction and the company's anticipated consistency that meets customers’ needs.
Apple Inc Company selected for this assessment because it is well known or popular
Smartphone brand of the world and also comes under the top five Smartphone brand in the
worlds (Gunasekaran, Subramanian and Ngai, 2019). Price ranges of iPhone products are quite
high and it also has huge demand because of its unique features like Camera quality, external
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body, battery life, storage, processor etc. In addition, product positioning is very well done by the
Apple Inc. in the customer’s mind.
Below mentioned market shares of Apple and its competitors help the customers to
understand the positing of this brand among the Smartphone sector (Top Smartphone’s Market
Shares, 2020). Below mention data and graphical representation provide better understanding.
Global Smartphone Shipments Market Share (%)
Brands 2018
Q1
2018
Q2
2018
Q3
2018
Q4
2019
Q1
2019
Q2
2019
Q3
2019
Q4
2020
Q1
Samsung 22% 19% 19% 18% 21% 21% 21% 18% 20%
Huawei 11% 15% 14% 15% 17% 16% 18% 14% 17%
Apple 14% 11% 12% 17% 12% 10% 12% 18% 14%
Xiaomi 8% 9% 9% 6% 8% 9% 8% 8% 10%
Oppo 7% 8% 9% 8% 8% 9% 9% 8% 8%
vivo 5% 7% 8% 7% 7% 8% 8% 8% 7%
Realme 0% 0% 0% 0% 1% 1% 3% 2% 2%
Others 33% 31% 29% 29% 26% 26% 21% 24% 22%
Global Smartphone Shipments (In Millions)
Brands 2018
Q1
2018
Q2
2018
Q3
2018
Q4
2019
Q1
2019
Q2
2019
Q3
2019
Q4
2020
Q1
Samsung 78.2 71.5 72.3 69.8 72.0 76.3 78.2 70.4 58.6
Huawei 39.3 54.2 52.0 59.7 59.1 56.6 66.8 56.2 49.0
Apple 52.2 41.3 46.9 65.9 42.0 36.5 44.8 72.3 40.0
Xiaomi 28.1 32.0 33.3 25.6 27.8 32.3 31.7 32.9 29.7
Oppo 24.2 29.6 33.9 31.3 25.7 30.6 32.3 31.4 22.3
vivo 18.9 26.5 30.5 26.5 23.9 27.0 31.3 31.5 21.6
Realme – – – – 2.8 5.0 10.2 7.8 7.2
Others 121.8 113.3 110.9 115.8 87.7 92.8 84.7 98.6 66.6
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