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

The Great Depression

Starting with the collapse of the US stock market in 1929, the Great Depression was a period of worldwide economic stagnation and depression. Heavy borrowing by European nations from the USA during World War I contributed to instability in European economies. Sharp declines in income and production occurred as buying and selling slowed down. Widespread unemployment resulted, and countries raised tariffs to protect their industries. America stopped investing in Europe. This led to a loss of confidence that economies were self-adjusting, and President Herbert Hoover was blamed for the crisis.

Hoovervilles

Depression shantytowns were named after President Hoover, whom many blamed for their financial distress.

The New Deal

A series... Continue reading "The Great Depression and the New Deal" »

**The Definition of Business-to-Business Marketing**

Business-to-business marketing (or B2B marketing, as it is commonly known) involves the sale of one company’s product or service to another company.

**How Business-to-Business Marketing Differs from Business-to-Consumer Marketing**

The key distinguishing feature of a business-to-business market is that the customer is an organization rather than an individual consumer.

The nature of the product is not a determinant to distinguish between consumer market and business market.

Business-to-business markets are characterized by a higher concentration than business-to-consumer markets.

B2B markets are less price-elastic than B2C and might even end up more commonly having a reverse elasticity.

Dimensions:

Business Structures

Sole Traders

A sole trader is any business that is owned and controlled by one person.

Advantages of Sole Trader

• It is easy to set up as no formal legal paperwork is required.
• Generally, only a small amount of capital needs to be invested, which reduces the initial start-up cost.
• As the only owner, the entrepreneur can make decisions without consulting anyone else.

Disadvantages of Sole Trader

• The sole trader has no one to share the responsibility of running the business with. A good hairdresser, for example, may not be very good at handling the accounts.
• Sole traders often work long hours. They may find it difficult to take holidays or time off if they are ill.
• They face unlimited liability if the business fails.

Partnerships

Partnerships... Continue reading "Business Structures: Sole Trader, Partnership, Limited Company, and Franchising" »

Value and Satisfaction

The buyer chooses the offerings he or she perceives to deliver the most value, the sum of the tangible and intangible benefits and costs to her. Value is a combination of quality, service, and price (qsp), called the customer value triad. Value perceptions increase with quality and service but decrease with price. (real value - what an enterprise is offering).

Marketing is the identification, creation, communication, delivery, and monitoring in relationship to expectations. If the performance falls short of expectations, the customer is disappointed. If it matches expectations, the customer is satisfied. If it exceeds them, the customer is delighted.

Marketing Channels

To reach a target market, the marketer uses three kinds... Continue reading "Marketing: Value, Channels, and Environment" »

COMPANY ORIENTATION TOWARD THE MARKETPLACE

The production concept is one of the oldest concepts in business. It holds that consumers prefer products that are widely available and inexpensive. Managers of production-oriented businesses concentrate on achieving high production efficiency, low costs, and mass distribution. Marketers also use the production concept when they want to expand the market.

The product concept proposes that consumers favor products offering the most quality, performance, or innovative features. A new or improved product will not necessarily be successful unless it’s priced, distributed, advertised, and sold properly.

The selling concept is based on hard selling is risky. It assumes customers coaxed into buying a product... Continue reading "Understanding Marketing Concepts and Holistic Marketing Dimensions" »

Types of Mandatory Law

Absolutely Mandatory Law: These legal rules do not allow any alteration, whether favorable or not to the worker. Examples include:

• Probationary period of one year for indefinite-term employment contracts in support of entrepreneurs
• Guarantees of salary
• Prohibition of employment of persons under sixteen years of age

Minimum Relative Mandatory Law: These legal rules impose the minimum conditions of employment favorable to workers. These legal rules do not permit worse working conditions. Examples include:

• The number of days of annual holidays (30 calendar days a year)
• The minimum interprofessional wage (2006-655,20€)

Maximum Relative Mandatory Law: These legal rules do not allow the setting of better working conditions (they... Continue reading "Spanish Labor Law: Contract Types, Trial Periods, and Extra Pays" »

Defining Competitive Territory and Boundaries in Mission Statements

• **Industry:** Companies may operate in one or multiple industries, including industrial goods, consumer goods, or services.
• **Products and Applications:** Firms define the range of products and applications they will offer.
• **Competence:** Companies identify their core competencies and leverage them.
• **Market Segment:** The type of market or customers a company targets.
• **Vertical:** The number of channel levels in which a company participates, from raw materials to distribution.
• **Geographical:** The regions, countries, or country groups in which a company operates.

Establishing Strategic Business Units (SBUs)

Companies can define themselves in terms of products or customer-satisfying... Continue reading "Defining Business Scope and Strategic Units" »

The Nature of Corporate Entrepreneurship

Why do we need Corporate Entrepreneurship?

Businesses are faced with:

• Changing dynamic markets
• Globalization
• Shorter product life cycles
• High rates of technological change
• Pressures to reduce costs
• Changes in business organization

A possible response

Some large firms responded to the changing environment by addressing their necessary response to working with a dynamic environment involving attitudes to:

1. Risk
2. Innovation
3. Flexible, rapid response
4. Organizational and managerial changes

Corporate Entrepreneurship (Intrapreneurship)

Corporate Entrepreneurship (i.e. Intrapreneurship) is defined as the “process by which teams within an established company conceive, foster, launch and manage a new business that is distinct... Continue reading "Corporate Entrepreneurship: Benefits, Strategies, and Environment" »

Integrated Marketing

Integrated marketing involves creating and executing marketing activities and programs that work together to deliver value to consumers. This includes ensuring consistency across communications, products and services, and channels.

An effective integrated marketing strategy requires choosing communication options that complement each other and developing a cohesive channel strategy.

Internal Marketing

Internal marketing focuses on hiring, training, and motivating employees to provide excellent customer service. It emphasizes the importance of a company-wide understanding and support for marketing efforts.

To achieve success, internal marketing requires vertical alignment with senior management and horizontal alignment with other... Continue reading "Understanding Marketing Concepts and Strategies" »

Spanish General Accounting Plan (PGC)

The Spanish General Accounting Plan (PGC) establishes the legal framework for technical accounting standardization. It aims to ensure that fundamental economic and financial information of companies is reliable and comparable.

Conceptual Framework

The conceptual framework is a set of fundamentals, principles, and basic concepts underlying the entire plan. It serves as an instrument that provides unity and consistency to the whole standard. Annual accounts must provide clear information.

Accounting Principles

• Going Concern: Financial statements are prepared assuming that the company will continue to operate in the foreseeable future.
• Accrual Basis: This involves the accounting records of business transactions