Economic Analysis of Digitech Software Pvt Ltd's Operations

This project analyzes the external economic factors affecting Digitech Software Pvt Ltd, a B2B software service company. It examines the impacts of recession, globalization, and government monetary policies on the company's operations and performance. The analysis highlights how recession reduces demand, globalization introduces competition, and monetary policies influence customer income and client business performance, subsequently affecting revenue. The project provides recommendations such as cost reduction through outsourced inputs and cash flow monitoring, understanding customer needs to differentiate products, increased marketing, and contingency planning for monetary policy contractions. The study concludes that while external economic indicators pose challenges, technological developments and strategic planning can help the company navigate these issues and maintain profitability.

Slide 2
Introduction
Economic operation and the activities of the business organisations are closely related to each
other. While, the changes in the factors of economies influence the decision making and the
performance of the organisation, the organisational performance, in turn, contributes to the
betterment of the economy as a whole. There are some of the macroeconomic factors that
influence the operation of the organisations such as Digitech software Pvt Ltd, B2B software
Service Company. In this paper the problems of the company from the external economy and
its indicators have been discussed (Abdoh et al. 2016). Apart from that, technological
modifications and development in order to deal with the situations have also been furnished
in the paper.
Slide 3
The recession and its impacts
The recession is one of the phases of the business cycle and it creates a lot of problems for
the economy and its entities. One of the biggest characteristics of the recessionary phase is
the lower economic activity that reduces the demand for the goods and the services in the
economy. The income of the customers reduces leading to a lack of output in the market. This
is a problem that reduces the demand for the products of the company. It not only reduces the
revenue of the company but it also compels the organisation to lower its qualities to remain
profitable in the market (Grum & Govekar, 2016). In the case of recession, the performance
of the client businesses deteriorates which in turn reduces the demand for the goods and the
services of Digitech software Pvt Ltd. Economic theories and models such as the AD-AS
clearly explains the problem faced by the company. In this case, the AD curve shifts to the
left side leading to a reduction in the price and the output level of the economy. The reduced
price level and the overall output of the individual firms lead to revenue loss.
Slide 4
Globalisation
Globalisation is a process where organisations have the ability to use the global market of the
world. It allows any company of the world to operate in the markets of any country in the
world. While globalisation allows the companies to reduce the cost of operation and hence

the price of the products, it also creates pressure on the small scale companies of the market
as well. One of the basic differences between the cost structure of the small and the large
scale company is the economies of scale that allows the large scale company to have a lower
average cost of production (Keller, 2018). Globalisation has allowed large scale foreign
companies in the markets that can reduce the price for their products and capture the market
share. Therefore it has reduced the profitability of Digitech software Pvt Ltd in recent times.
Slide 5
Monetary policies of the government
Monetary policies of the government are an important tool to regulate the economy and its
activities. Monetary policies are generally of two types based on the end effects. The
monetary policy where the money supply increases are known as expansion and where the
money supply reduces is known as contraction (Nielsen, Lander & Lauritsen, 2015). The
problem that Digitech software Pvt Ltd is facing is in case of low money supply the incomes
of the customers are reducing and the performances of the client businesses are deteriorating.
This, in turn, is lowering the demand for the software services of the company. In addition to
that, this decrease in the money supply is also the reason behind the reducing revenue of the
company as well.
Slide 6
Recommendations
One of the most important recommendations based on the study is to have an outsourced
input to the production process of the company so that it can reduce the cost in the wake of
the recession. Apart from that, it is also recommended to the management to have a separate
team to monitor the cash flow of the company so that cost can further be streamlined and help
the company remain profitable in this case. There are some of the costs which can be cut in
order to reduce the cost of operation of the company (Ramasamy & Abar, 2015). Apart from
that, in order to deal with the globalisation, it is recommended to the management of the
company is to understand the needs of the customers of the market. Understanding the needs
of the customers of the market would help in designing a product completely different from
that of the rivals. Therefore loyal customers can be retained having lesser influences on the
profit of the company. It is also recommended to the company to spend more on the
marketing of the products so that a brand reputation can be created which would further help

the company to combat the rival companies having a larger scale of production. Lastly, it is
also recommended to the company to have a contingency plan in case of a contraction
monetary policies from the side of the government. This may include the same reduction in
the cost of operation so that profitability can be maintained.
Slide 7
Therefore, the study finds out that, external economic indicators influence the operation of
the businesses such as Digitech software Pvt Ltd. While the recession can reduce the demand
for the products of the company, globalisation and the emergence of the foreign companies
can instil competition in the market creating a problem for the company. However, the paper
has also shown that technological developments can allow the company to deal with the
changes in the external economy.