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

Demand: The quantity of a good or service that consumers are willing and able to purchase at a given price and time. Factors influencing demand include:

1. Price of the Good: Changes in price can increase, decrease, or maintain demand.
2. Prices of Other Goods:
   • Substitutes: Demand increases when the price of a substitute good rises.
   • Complements: Demand decreases when the price of a complementary good rises.
   • Independent: Demand is unaffected by changes in the price of other goods.
3. Consumer Income:
   • Normal Goods: Demand increases with higher income.
   • Inferior Goods: Demand decreases with higher income.
4. Consumer Tastes and Preferences: Popularity increases demand.

Supply: The quantity of a good or service that producers are willing and able to sell at a given price... Continue reading "Understanding Market Demand, Supply, and Competition" »

Ikea

Strategy: Actions managers take to attain firm’s goals. Strategies focus on profitability (rate of return on invested capital) and profit growth (% increase in net profits over time). How to Increase Firm’s Profitability: Value must be created by consumer. Value creation measured by difference between price charged and cost of production. 2 strategies: Differentiation and low cost. Strategic Positioning: To maximize profitability firm must be efficient, configure internal operations, have the right organization structure (all must be consistent). Value Creation Activities: 1 Primary activities (creating, marketing and delivering product to buyers and providing support after-sale). 2 Support Activities (provides inputs that allow primary... Continue reading "Ikea Strategy: Global Expansion and Profitability" »

Product Policy

Product is everything that is offered in a market to satisfy a need, benefiting the company. A product has three levels: commodities, the actual product, and augmented product attributes.

Product-Related Attributes

These include quality and design.

The Brand

A combination of images, words, and graphics intended to identify a product. There are family and individual brands, trademarks of the manufacturer or distributor.

The Package

Wrapping dedicated to keeping the commodity safe and also serves to make the product more attractive to the consumer.

The Label

A tool providing product information.

Price Policy

The price is the number of monetary units that must be paid to acquire a unit of the product. Formulas for pricing include:

• Prices based

Globalization and Economic Factors

Globalization encompasses economic globalization (global business), the economy of communication and knowledge. Two key factors drive this: new knowledge production and communication (innovation), and the Internet as a new form of organization.

It should adapt the fundamentals of business function.

Internet's Impact on Companies:

• Better communication with foreign entities (cheaper, faster, and improved economic management and operation).
• Greater choice of investment and financing (no frontiers thanks to the Internet).
• Increased labor productivity (flexible working relationships).

Interconnection Between Companies and Institutions:

• Improved customer relationship provider (intensifies and facilitates communication).

Understanding Economic Principles: Demand, Production, and Costs

The Concept of Demand

Individual Demand Curve

The individual demand curve represents the quantity of a good that consumers want to purchase at various prices.

Variables Affecting Demand

• Price of the good: The most direct influence.
• Consumer income: Affects purchasing power.
• Prices of other goods: Relates to substitutes and complements.
• Tastes and preferences: Subjective consumer desires.

Demand Function

The demand function specifies, for each possible price of a good, the quantity demanded by the consumer.

Effects on Demand

• Substitution Effect: Occurs when consumers switch to a relatively cheaper substitute due to a price change. (e.g., choosing dental floss over a toothbrush if the toothbrush

Defining Your Business Strategy and Market Position

This involves answering a fundamental question: to achieve our financial objectives, how are we perceived by our customers?

However, we must not only answer this general question but also determine which markets we will enter, who our target customers are, and how we will compete. Resolving these questions requires reflection on the following aspects:

• What are our target segments?
• What value proposition do our target segments prefer?
• What is our current value proposition, and how should we change it?
• What are our sales objectives?
• How do we achieve these goals?

Understanding the Value Proposition

“The value proposition defines the firm's strategy for the client, describing the unique combination

Labor Relations

Labor relations involve the company's interactions with employee representatives, which can include:

• Company Committee: In companies with over 50 employees.
• Staff Officer: Up to 3 in companies with between 10 and 50 employees.
• Representatives: Unions are associations of workers created to defend their common interests. All workers have the freedom of association.

The company and employee representatives collaborate on collective labor conditions, negotiate collective agreements, and seek solutions to conflicts. A collective agreement is a contract negotiated and concluded by representatives of workers and employers, regulating working conditions in a specific geographic area and activity.

If the company and employees disagree on an... Continue reading "Understanding Labor Relations, ICT, and Stock Management" »

Foundations of Economic Development

Productivity Enhancements

Productivity is the quantity of goods and services that each unit of productive factor can generate. If it grows, it increases the country's production. It depends on productive capital, human capital, natural resources, and technological expertise.

Savings and Investment

Encouraging savings allows a portion of income to be invested, accelerating economic growth. If domestic savings are not generated, foreign investment can be utilized.

Education and Training

Investment in human capital produces positive synergies. Human capital is considered a decisive factor in raising productivity and fostering economic growth.

Free Trade

Removing trade barriers improves the possibility of free trade... Continue reading "Economic Development Factors and Underdevelopment Traits" »

Expansion of the Crisis (1959-1975)

Economic Expansion (1959-1973)

The timid recovery in the fifties was quite worrying. It could have been without oil for lack of money. In 1957, the government incorporated technical experts in economics (technocrats) linked to the Opus Dei religious institution. The most prominent were Rubio (Minister of Finance) and Ullastres (Minister of Commerce), who prepared the Stabilization and Liberalization Plan of 1959.
Spain won the aid of the IMF and OEEC. The stabilization plan consisted of modifying autarky and establishing the foundations for the Spanish economy to progressively convert into a classic capitalist system. The economic situation as a result of applying autarky was absolutely disastrous, and

Enterprise and Environment

The company is the central and most important institution of the economic machinery of our society. As such, it requires objectives (e.g., maximizing profit at minimum cost), functions (financial, production, and commercial), and an appropriate organizational structure.

Business Location Factors

• Market Demand: Examine whether the area has interest in the product being offered and investigate the competitive situation.
• Communications and Transport: Consider the available means of transport and whether the location is easily accessible to other companies and customers.
• Labor Market: Check the availability of necessary manpower, whether specialized or not.
• Supply of Raw Materials: Assess the quality, cost, and availability