Notes, summaries, assignments, exams, and problems for Economy

Accounting 1:

Car Expenses

Owning a car brings freedom, but it also comes with responsibilities. The costs involved with buying a car are more than just the purchase price. A young person needs to know how much they can afford to pay:

• For one-off expenses, such as: purchase price, stamp duty & transfer of registration fee (where applicable).
• For annual and ongoing expenses, including: registration, compulsory car insurance, optional car insurance, loan repayments (if applicable), fuel, parking, car maintenance, & car servicing (for periods not covered by warranty if applicable).

Car Insurance

Car insurance can cover the cost of your car if you damage it, it is stolen, or if anyone is injured. If there is an accident involving your car, you... Continue reading "Car Expenses: A Comprehensive Guide to Costs and Financing" »

Management Buyouts Explained

Q: Management Buyouts are a form of buyouts. Explain this term.

Management buyouts (MBOs) are acquisitions where the company's existing management team purchases the company. While legally similar to other acquisitions, MBOs differ because the buyers are also the company's managers. This often means a limited due diligence process, as the buyers already possess in-depth knowledge of the company. Sellers are also likely to provide minimal warranties, assuming the management team is more familiar with the company's state than they are.

Stock Issuance and Dividend Calculation

Q: Company XYZ wants to issue more Common Stock of Face Value Rs 12. Next Year the Dividend is expected to be Rs. 3 per share assuming a Dividend

Corporate External Growth Strategies

Economic Conditions

Labor shortages

Lack of market growth

Vertical Growth

Achieved by taking over a function previously provided by a supplier or distributor.

Horizontal Integration

The degree to which a firm operates in multiple geographic locations at the same point in an industry’s value chain.

Vertical Integration

The degree to which a firm operates vertically in multiple locations on an industry’s value chain, from extracting raw materials to manufacturing to retailing.

Forward Integration

Assuming a function previously provided by a distributor.

Backward Integration

Assuming a function previously provided by a supplier.

Horizontal Growth

Expansion of operations into other geographic locations and/or increasing... Continue reading "Corporate Growth & Stability Strategies" »

Essential Definitions in Economics

Economics

The study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided.

Scarcity

All economic questions arise because we are unable to satisfy all our wants.

Marginalism

The process of analyzing the additional or incremental costs or benefits arising from a choice or decision.

Sunk Costs

Costs that cannot be avoided, regardless of what is done in the future, because they have already been incurred.

Efficient Market

A market in which profit opportunities are eliminated almost instantaneously.

Opportunity Cost

The process of choosing a good or service over another. The item that you don't pick is the opportunity cost.

Specialization

When an individual or... Continue reading "Essential Economic Concepts: Definitions and Core Terms" »

International vs. Domestic Marketing

International Marketing is the process of planning and executing transactions across national borders to create exchanges that satisfy individuals and organizations. It includes exports, imports, licensing, joint ventures, subsidiaries, and management contracts.

Domestic Marketing focuses on the supply and demand of goods and services within a single country. Businesses expand internationally due to limited domestic market size and growth.

Key Differences

International Marketing: Operates products, services, promotions, pricing, and distribution in multiple countries.

Domestic Marketing: Operates products, services, promotions, pricing, and distribution in a single country.

International Marketing Strategic Plan

Developing Forecasts

• Quantitative forecasts: Typically based on historical data or tests and often involve complex statistical computations
• Exchange Qualitative forecasts: Based on intuitive judgements

Establish Goals and Objectives

• Goals: A broad, long-range target or aim
• Objective: Specific, short-range target or aim

Establishing goals and objectives

Specific-> Measurable-> Attainable-> Relevant-> Time limited

Art and Science of Marketing

Marketing in a Changing World

• The process of creating value for customers and building relationships with those customers in order to capture value back from them

The Role of Marketing in Society

• Needs: Differences between a person's actual state and his or her ideal state; they provide the basis motivation

1. Backward Integration

   Assuming a function previously provided by a supplier.

2. Bankruptcy

   A company gives up management of the firm to the court.

3. Competitive Strategies

   Cost leadership, differentiation, and focus.

4. Concentric Diversification

   Growth into a related industry with a strong competitive position.

5. Conglomerate Diversification

   Diversifying into an industry unrelated to its current one.

6. Cooperative Strategies

   The direction of the firm as a whole and the management of its business or product.

7. Corporate External Growth Strategies

   Funds to purchase other companies.

8. Defensive Tactics

   Takes place in the firm’s own current market position as a defense against rivals.

9. Economies of Scale

   Cost falls as the company benefits at a higher level.

10. Executive

Antitrust Law: Article 101 and 102

Antitrust law, also known as competition law, addresses anticompetitive behavior through Article 101, which prohibits anticompetitive agreements, and Article 102, which prohibits the abuse of a dominant position.

Market Structures

Monopoly: Characterized by a single agent, heterogeneous products, and significant barriers to entry, which can be legal, natural, or artificial.

Oligopoly: Involves a few agents with substantial market power, heterogeneous products, and barriers to entry that are either artificial or natural.

Monopolistic Competition: Features many agents offering differentiated products.

Perfect Competition: Consists of a large number of agents, homogeneous products, no barriers to entry, and no individual... Continue reading "Antitrust Law: Market Structures and EU Single Market" »

Human Resource Management (HRM)

HRM is a management function with a specific focus on people. It's not an exact science, as human behavior can be unpredictable. The primary goal of HRM is to guide individual and group behavior by considering both individual characteristics and the environment.

Individual Characteristics

• Personality: This is largely unchangeable and influences how individuals interact with others and their work.
• Motivation: This is complex and influenced by both internal and external factors, such as salary. HRM plays a crucial role in maintaining employee motivation, as it directly impacts performance.
• Competence: This encompasses knowledge (acquired through education and training), abilities (inherent skills), and experience (gained