Annotated Bibliography: Business Profit and Demand Analysis

This annotated bibliography explores the complex relationship between business profitability, demand, and pricing strategies. It delves into how factors like consumer preferences, market information, and technology influence profit margins. The bibliography examines how companies can navigate business failures and adapt pricing strategies to increase demand, emphasizing the importance of understanding product value for customers. The analysis includes insights from various sources, such as Minsky's work on financial instability and Kim & Mauborgne's Blue Ocean Strategy, which provides a framework for creating uncontested market space. It also explores how declining businesses can leverage strategies like sales to improve their marketing techniques and recover from declining states by focusing on operation improvement and future market expansion. The annotated bibliography provides a comprehensive overview of business profit maximization techniques.

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Annotated Bibliography
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Topic: If a business drops, its price will always increase demand and it will make more
profit
Minsky, H.P., 2015. Can" it" happen again?: Essays on instability and finance. Routledge.
The various forces which help in determining the profitability are consumer preferences,
market information and technology. The companies which are incurring huge profits has to break
the rules and adapt the new pricing strategies. There are some companies which have the
capability of implementation of various kinds of strategies in terms of business failure. It is
important for the customers to understand the value of the products. When the revenue of an
economy falls, it is important to understand that and take the appropriate actions accordingly. In
an economy which is showing a very slow growth, it is reasonable to lower the price of the
product so as to increase the profitability of the company. If the demand of a particular product is
perfectly inelastic, buyers will purchase the same quantity of the goods at a much higher price.
Whereas if the demand for the product is elastic, the customers will not be attracted if the
retailers raise the price of the product. The prices of the product are always sensitive and even if
the firms falls to a much lower level. There will be decline in the average price of the product. It
is likely that the demand for the product will increase when there will be price war. The
advantages of falling prices over all other competitors are always temporary and short lived. The
customers will set a particular expectation of the price and he/she will prefer the product keeping
aside the price war. In case of business failure, the customers will be more attracted to a product
which is available at a much higher price. The customers will prefer to buy the product because
he/she will understand the benefits of the product keeping aside the price. This will help the
business firm to increase its profit because the business firm will sell the product at a much
higher cost than the normal situation. The business firm can sell the product at a much higher

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cost till the time the customer will perceive the benefits of the product. On most cases, it is seen
that the company will fight on the price war as a part of the deliberate strategy. The companies
will try to invest in new technologies and methods so that it can reduce the cost of production
and sell the products at a profitable price.
Kim, W. C., & Mauborgne, R. A. (2014). Blue ocean strategy, expanded edition: How to
create uncontested market space and make the competition irrelevant. Harvard business
review Press.
The growth has always been experienced in the company that is in their declining state.
This is one of the shocking incidents that have been evident over the years. This growth is
evident because of the use of traditional strategic planning result that was supposed to give a
limited growth experience. It has been seen that the declining industries does not focus on
competition like the prospering industries. Their main motto has always been to fight
competition without trying to defend the competitive market. The declining business main aim
will be clear off the sale at that crucial point of time rather than focusing on competition. This is
because, if it aims to clear off the stock then in future t can make plans to increase its operation
in a better way. Moreover, clearing off the sale means offering the goods to the customer at a
lower rate. Thus, this will increase their demand for the goods at that price as the customers will
buy more at a less price compared to other companies selling same products. This will add to the
marketing of the company in the long run and customers buying products at a less price now will
use the product and get aware about the company and the quality they sale. Thus by clearing the
sale the company gets an opportunity to improve its marketing techniques in front of its
customers. The improved image of the declining company in front of the customers will help the
company to overcome from the declining state. On the other hand, when the company will be in

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its recovering stage this selling technique will e beneficial for it to increase demand. Customers
will be aware of the products and might demand products more than before. Thus, a declining
business can use this tactics to increase its profit in future. The only thing that the company
should keep in mind is that it has to forget its competitors in this situation and just focus on
increasing its own demand. Operation improvement and future market expansion should be the
only aim of the company at its declining stage.

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References
Kim, W. C., & Mauborgne, R. A. (2014). Blue ocean strategy, expanded edition: How to create
uncontested market space and make the competition irrelevant. Harvard business review Press.
Minsky, H.P., 2015. Can" it" happen again?: Essays on instability and finance. Routledge.
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