Report: Economic and Financial Management - Polaroid Business Failure

This report provides an in-depth analysis of the economic and financial factors that led to the failure of Polaroid. It examines the impact of various economic factors, including changing technology, market competition, the labor market, and Brexit, on the company's performance. The report also discusses the application of economic theory in contemporary business contexts, focusing on the theories of demand and supply. Furthermore, it explores the macro and micro forces that influenced Polaroid, such as suppliers, customers, competitors, and political, economic, social, and technological factors (PEST analysis). The conclusion emphasizes the importance of sound economic and financial management in preventing business failures. The report uses information from various books, journals, and online resources to support its findings and provide a comprehensive understanding of the topic.

Report: Economic and
Financial Management-
what cause the failure of
Polaroid

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Impact on economy on the business organisations......................................................................1
Economic theory to the contemporary business contexts............................................................2
Macro and micro forces on contemporary businesses.................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Economic and financial management includes various analytical techniques, methods,
standards and indicators which are subjected to manage the finance of any organisation
(Burtonshaw-Gunn, 2017). In this report, Polaroid is selected. The selected business was was
established by Edwin H. Land in the year 1937 and headquarters located at Minnetonka,
Minnesota, US. It provides consumer electronics, former instant cameras and eye wear products
and is a photography, instant film making organisation.
The report includes a detailed information related it includes the impact of Polaroid of
Brexit, changing technology, inflation, competition and labour market in the particular aspect of
Polaroid. Further, it discusses about the economic theory in the contemporary business contexts.
Lastly, macro and micro factors which influences the failure of contemporary business.
MAIN BODY
Impact on economy on the business organisations
Economic factors affected the Polaroid functioning in negative as well as positive
manner. Various economic factors impacts the working of any company such as interest rates,
taxes, labour costs, government policies, capital formation. Such factors plays an important role
in the economy which provides the guidelines to the firm for attaining their objectives
successfully and efficient manner. They includes various legal regulations which are mandatory
for any business organisation to follow. Any business whether international or domestic is
affected by the changing economic situations in the market place. The main objective of the
business is to maximise the profitability. Polaroid carefully analyses all the economic factors
(CustomerThink Corp, 2019). Various economic factors which influences the failure are the
following:
 Changing technology: Technology impacts on the business costs, communication
process, employee productivity, collaboration and outsourcing of the selected business.
As the environment is dynamic, so are the technological factors. Polaroid was the
technology based company which provides innovative cameras to the market. The
managers of selected business uses different technologies in their products. They have
faced various technological challenges instead of market challenges. They worked on the

assumption that the technological innovations will be accepted by the market but this
causes the lead in the failure of the business.
 Competition: There are various competitors in the market place who provides
homogeneous products to various customers. This helps in providing best products as
well as services to the potential targetted customers. With relation to Polaroid, numerous
rivals were having the market power. The competitors were also providing the
homogeneous products and services to the customers at minimum prices which impacted
the business towards the failure.
 The labour market: The rigidity of the labour market also impacts any organisation.
High labour costs reduces profits where as low labour costs increases absenteeism and
issues with the wage system. Various efforts were made by the Polaroid managers to
collect the labour market information but fails to satisfy them by implementing tools and
technologies. Thus, impacted in the failure of the Polaroid.
 Brexit: Brexit was the decision of United Kingdom to leave from the European Unions.
The UK was the targeted market of Polaroid. After the separation it was difficult for the
managers to provide various products and services in the separated countries which
affected the customer retention as well as profitability and leads to the failure of Polaroid.
Thus, all these economic factors had great impact on the working of the selected
organisation and lead to the failure of the Polaroid.
Economic theory to the contemporary business contexts
Economic theory helps in the theoretical construct which shows economic process by
the set of variables & set of logical relations among them. To understand the economic
phenomena, it is very helpful and it is associated with the particular situations to the chosen
organisation. The main aim of this theory is to develops simplified economic models which is
based on consumer behaviour, attitude, assumptions and expectations (Giannakis and
Papadopoulos, 2016). The economic theory can be use by Polaroid in order to resolve the issues
which are related to financial management and economic. As economic theory of demand &
supply is helpful to consider economic system & the functions which are associated with it. The
demand of products are related with the buying behaviour of consumers during a specific time
duration and the prices also. Demand denotes that how much quantity of goods and services are
being desired by the consumers where as supply denotes that how much the market can supply

the products in order to fulfil the wants of consumers. As demand and supply are interlinked with
each other and it can be understand by law of demand: it shows that all other factors are constant
but the prices of goods are not. When prices of camera has been increased by the company than
demand of products can be reduce because consumers does not show their willingness to
purchase the products which are offered by the organisation. As a result corporation have to
reduce the supply in the market because people does not buy the products and the demand curve
will goes down. The law of supply demonstrates the units which will be sold at a particular price.
If Polaroid increase the supply of products than the prices of products will be high because the
demand is more so consumers are ready to pay more price for the goods and the supply curve
will be upward. It is helpful for the organisation to generate the revenue and market share can
also be increase. If company increase the supply of its products but buyer are not ready to
consume the goods in that case prices have to be reduce to sell the products. So management
have to analyse the demand in the market and on the basis of it supply can be increase so that
Polaroid can generate higher revenue. As a result economic and financial management related
issues will be resolve. So this economic theory can be use by the organisation in its business.
Macro and micro forces on contemporary businesses
Every business faces various factors in the dynamic environment. The macro and micro
forces are the part of such environment whi9ch have great impact on the working of any
organisation. The micro forces are those controllable forces which leads to have minimum
impact the organisational workings to achieve profits. Such factors can be analyses and proper
plans can be prepared to control them (Nica, Manole and Potcovaru, 2016). Several micro forces
impacts the Polaroid. Some are the followings:
 Suppliers: Suppliers influences the working of Polarois in great extent. They provide the
supervisors in the selected business with the new materials, cutting tools, market
information and various more. They provide the raw materials as per the quality and
quantity described to them and supply the finished products to the customers.
 Customers: All businesses performs operations to satisfy the customers, same is done by
the respective entity. It is very easy to produce a product but at the same time much
difficult to sell the product to the potential customers. The Polaroid managers creates the
demand, increases the promotional campaigns to provide information and retain its loyal
customers.

 Competitor: Various competitors affects the decision making ability of the managers of
Ploaroid. The strategies of competitors affects the selected business strategies to position
the place in the competitive marketplace.
The macro forces are the uncontrollable and larger societal forces which leads to have
great impact on performing the tasks and activities of the company. The analysis of such forces
can be done through PEST analysis (Pratt, 2016). The PEST analysis includes the political,
economical, social and technological factors. The description of each factors is as follows:
 Political factors: such factors influences at great extent in the pertaining organisation.
For the managers of the selected business it is very important to consider and follow
several foreign trade policies, environmental laws,, labour laws, government policies by
scanning the external environment.
 Economic factors: These factors influences the performance of Polaroid. Various
economic forces includes inflation rates, consumer disposable income, economic growth,
interest rates, taxable rates prevailing in the market. By taking the consideration of each
factor, the executives of chosen business formulates wise decisions.
 Social factors: These factors are used for contributing the values by the representatives
of Polaroid with the society. Different business performs operations with different
cultures. It includes education level, power structure, culture, gender roles and various
other factors. Such factors helps the Polaroid employers to understand the perceptions
and preferences of customers in the competitive market.
 Technological factors: Changes in the level of technology impacts the selected
organisational performance. Such factors includes protection of rights and patents,
investments in research and developments, technological innovations, latest technological
know how. The IT department of Polaroid keeps an eye on the drastic changes in the
technology field and accordingly frames the usage in the products.
CONCLUSION
As per the report it can be concluded that proper management of economic and financial
factors is very necessary in the business to overcome the problems of failures. The report
includes the impact of changing technology, competition, labour market, Brexit has on business
organisation. It further describes the application of relevant economic theory in the contemporary

business contexts. It also provides a detailed analysis of the macro as well as micro forces
economic factors which influences the failure of the contemporary business.

REFERENCES
Books and Journals:
Burtonshaw-Gunn, S. A., 2017. Risk and financial management in construction. Routledge.
Giannakis, M. and Papadopoulos, T., 2016. Supply chain sustainability: A risk management
approach. International Journal of Production Economics. 171. pp.455-470.
Nica, E., Manole, C. and Potcovaru, A. M., 2016. Environmentally sustainable economic
growth, energy use, and CO2 emissions in China. Economics, Management and
Financial Markets. 11(2). p.101.
Pratt, J., 2016. Financial accounting in an economic context. John Wiley & Sons.
Online:
CustomerThink Corp. 2019. [Online]. Available through:
<http://customerthink.com/polavision_polaroids_disruptive_innovation_failure/>