Notes, summaries, assignments, exams, and exercises for Economics for University

Drivers of International Expansion

Push Factors

• Domestic market maturity or saturation
• Legal restrictions
• Increasing costs
• Unfavorable economic conditions
• Unfavorable demographic changes

Pull Factors

• Corporate philosophy
• Perception of growth opportunities
• Niche opportunities
• Imitation of competitors
• Following the customers
• Technology acquisition

Facilitating Factors

• Accumulation of experience
• Decreasing barriers to international trade
• Enhanced communication technologies
• Managers’ drive and vision
• Learning from other firms’ experience

International Entry Modes

Exporting

Indirect Export

• Foreign buyer/broker:
  • Advantages: Simple and cheap; does not require experience.
  • Disadvantages: Total lack of control over marketing strategies and market selection.
• Independent agents,

Thousands of people are looking for a safer and better life in the European Union. A recent comparative study by the Max Planck Institute for Social Law and Social Policy reveals that refugee protection rights are very different within the EU. For instance, the actual provisions inform that the minimum standards are implemented in very different ways at the national level, and this has serious consequences for the individual in some cases. The comparison of subsistence payments reveals not only a discrepancy in cash payments, but also it demonstrates that a larger number of states do not base their payments on the level of social security assistance provided.

Discrepancies in EU Subsistence Payments

The study concludes that: “Such provisions...

The Euro: Currency of the Eurozone

The Euro is the official currency used by most member states of the Eurozone. The Eurozone represents a monetary and economic union of European countries that share a common monetary policy and currency. Currently, there are nineteen members; however, some nations, such as Denmark and the United Kingdom, opted out of adopting the common currency.

Monetary and Fiscal Governance

The monetary policy of the Eurozone is managed by the European Central Bank (ECB). All national central banks within the Eurozone are required to adhere to the decisions set by the ECB. Conversely, fiscal policy remains the responsibility of each individual nation, though countries are encouraged to coordinate their efforts to ensure collective...

Types of Market Research Information

• Demographics: Knowing more about the characteristics of your market.
• Economic information
• Social and cultural influences
• Political and legal information and influences
• Consumer buying habits and behavior
• Market size and potential for growth
• Competitor information
• Resources, support, and costs

Psychic Distance

Psychic distance refers to the difference in socio-cultural factors between countries. It is arguably easier to enter a market if the distance is smaller. Therefore, businesses should choose countries that have similarities to their domestic market.

Political and Legal Influences

Two current examples include Brexit and Donald Trump as US President. The importance of these factors lies in their influence on the...

Business Financing Sources for Startup Companies

Understanding Startup Financing Needs

When a company is founded, it is called a startup company. A startup company is a business that is in the first stage of its operations. These companies are often initially financed by their founders as they attempt to capitalize on the development of a product or service for which they believe there is a demand.

Due to limited revenue and initially high costs, most of these small operations are not sustainable and require significant financing to survive. A common challenge for these nascent companies is the difficulty in securing external financing, as the majority of investors may not rely on their solvency and liquidity because their operational activity...

Entrepreneurship: Investment and Startup Opportunities

Entrepreneurship is the capacity and willingness to develop, organize, and manage a business venture, along with its associated risks, to generate a profit. When combined with land, labor, natural resources, and capital, entrepreneurship becomes an essential ability to succeed in an increasingly competitive global marketplace.

Identifying Market Needs and Startup Foundations

Entrepreneurs often identify unmet market needs. By conducting thorough market research, they analyze risks, consumer behavior, suppliers, and potential profitability before founding a company. These new ventures are known as start-up companies.

Startups are typically financed by their founders as they attempt to capitalize...

Oil Price Fluctuations and Economic Impact

Oil has always been a vital commodity because a significant portion of the global economy depends on its prices and fluctuations. Throughout history, it has experienced larger fluctuations than more stable investments, such as stocks and bonds.

The Role of OPEC in Market Stability

The OPEC (Organization of the Petroleum Exporting Countries) is the primary influencer of these fluctuations in oil prices. It is a consortium made up of 13 countries that controls approximately 40% of the world's oil supply. Recently, oil prices have fallen, reaching levels around $52 per barrel. These changes in price are determined mainly by the laws of supply and demand: when supply exceeds demand, prices fall, and the opposite...

New-Product Pricing Strategies:~Market-skimming pricing (price Skimming)Setting a high price for a new product to Skim maximum revenues layer by layer From the segments willing to pay the high Price; the company makes fewer but More profitable sales. ~Market-penetration pricingSetting a low price for a new product to Attract a large number of buyers and a Large market share.Product Mix Pricing Strategies: Product line pricing Setting prices across an entire product line, 
O Captive product pricing Pricing products that must be used with the main product,By-product pricingProduct bundle pricing Pricing bundles of products sold together. 

Aggregate Demand Shifters

The following factors cause shifts in aggregate demand:

• C (Consumption): Consumer wealth, consumer expectations, household indebtedness, and taxes.
• I (Investment): Interest rates, expected returns on investment, business taxes, technology, and the degree of excess capacity.
• G (Government Spending)
• Xn (Net Exports): National income abroad and exchange rates.

Aggregate Supply Shifters

The following factors cause shifts in aggregate supply:

• Input Prices: Domestic resource availability (land, labor, capital, entrepreneurial ability), prices of imported resources, and market power.
• Productivity
• Legal/Institutional Environment: Business taxes, subsidies, and government regulation.

AS Curve Ranges

• Horizontal Range: Includes real levels

Report from the Chairperson

Executive Summary

This report provides an analysis and evaluation of the current and prospective profitability, liquidity, and financial stability of Outdoor Equipment Ltd. It was commissioned to examine why the sales volume of Choice Chocolate has dropped over the past two years since its peak in 1998 and to recommend ways of increasing the volume.

Introduction

This section outlines the key points to be addressed.

Findings

Results of data analyzed show that all ratios are below industry averages. In particular, comparative performance is poor in the areas of profit margins, liquidity, credit control, and inventory management. The research draws attention to:

• The shares of key competitors
• The size of the market
• Projections