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

Global Marketing Channels and Logistics

Key Concepts in Physical Distribution

Intermodal Transportation

A freighter loaded with 40-foot shipping containers utilizes **Intermodal Transportation**.

A French winery packs its wine in a 40-foot container, utilizing **Intermodal Transportation**.

Inventory Management Tools

An important new tool for inventory management is: **RFID** (Radio-Frequency Identification).

Inventory management is primarily focused on: **ensuring cost control**.

Logistics and Physical Distribution

Order processing, warehousing, and transportation are components of: **Physical Distribution and Logistics**.

Physical distribution and logistics are concerned [with many operational aspects, but not typically] **designing in-store displays*

Exercises in International Trade

1. Define the Following Terms:

• Forwarding Agent: A person, agency, or enterprise engaged in the collection, shipment, and delivery of goods. For example, a company that arranges the transportation of products from a manufacturer to a retailer.
• Green Channel: The route followed when passing through customs at an airport or other port of entry for passengers who claim to have no dutiable goods to declare.
• Customs: The official organization responsible for collecting taxes (duties) on goods entering a country and preventing the entry of illegal goods.
• Freight: Goods transported in bulk by truck, train, ship, or aircraft.
• Invoice: A document listing goods supplied or services rendered, stating the sum of money owed for

Inventory and Logistics Fundamentals

• The less frequently a product is ordered, the lower the inventory carrying costs: FALSE
• The term "logistics" management describes: TRUE
• Three of the world's five largest retailers: TRUE
• Trucks' capability is second only to water: FALSE
• Water transportation is rated "low": TRUE
• Which of the following transportation modes is fastest: Air

Global Retail Strategy and Market Entry

• The reason why Saks Fifth Avenue has licensed: TRUE
• The retail environment in developing countries presents: Mom-and-pop stores
• To motivate shopkeepers to stock more of P&G's products: Golden Store Program
• Walmart pulled out of Germany: TRUE
• What solution did Andersen Consulting provide: Package the bread in plastic bags
• When a company uses intermodal

The Necessity of a Firm's Mission Statement

Firms require a clear mission statement for several critical reasons, as it defines the organization's purpose and trajectory. A well-defined mission statement:

• Helps to determine the direction for the company.
• Displays the future vision of the company.
• Provides the basis for organizational alignment.
• Offers a structure for decision making.
• Helps to frame strategy and facilitates helpful changes.
• Assists in both strategy implementation and evaluation.

Understanding Porter's Five Forces Model

Porter's Five Forces Model is a crucial framework for analyzing industry competition and developing robust business strategy. The five forces are:

1. Rivalry Among Competing Firms

   This force usually takes the form of jockeying

Key Economic Concepts and Systems

Economic Systems and Ideologies

• Keynesianism: A capitalist ideology that defends a degree of state intervention in economic activity. It promotes greater public expenditure to protect the poorest social strata.
• Economic System: The method of organizing and undertaking economic activity. It addresses three fundamental questions: what goods to produce, how to produce them, and for whom they are produced.
• Socialist System: An economic model regulated by state-mandated plans, often called a planned economy. It is based on state ownership of companies and the pursuit of social equality.
• Welfare State: A system provided by mixed economies to their citizens, based on public education and healthcare. Governments supporting

Core Business and Marketing Definitions

Public Relations (PR)

Public relations embraces publicity but is broader; PR includes other ways of gaining favorable responses. Typical PR activities include:

• Donating money to charity
• Giving speeches
• Participating in community activities
• Sponsoring events
• Other public-facing activities

PR is the organizational function that manages the firm's communications to achieve a variety of objectives, including building and maintaining a positive image, handling or heading off unfavorable stories or events, and maintaining positive relationships with the media.

Intensive Distribution

When customers limit their search efforts, products must be easily available. Intensive distribution is a strategy where the firm maximizes... Continue reading "Essential Marketing, Distribution, and Pricing Concepts Defined" »

Advantages of Strategic Alliances

Technology Exchange

This is a major objective for many strategic alliances. Many breakthroughs and major technological innovations are based on interdisciplinary and/or inter-industrial advances. As a result, it is increasingly difficult for a single firm to possess the necessary resources or capabilities to conduct its own effective R&D efforts. This is further perpetuated by shorter product life cycles and the need for companies to stay competitive through innovation. Some industries that have become centers for extensive cooperative agreements are:

• Telecommunications
• Electronics
• Pharmaceuticals
• Information Technology
• Specialty Chemicals

Global Competition

There is a growing perception that global battles between... Continue reading "Strategic Alliances: Advantages, Risks, and Partner Selection" »

Fixed Costs

Expenses that do not change as a function of the activity of a business, within the relevant period.

Price-Elastic Demand Curve

When the price goes down a little, volume increases significantly. When the price goes up a little, volume decreases significantly. Many grocery items are price elastic.

Price-Inelastic Demand Curve

Volume does not change much, even with significant price changes. Products like critical raw materials, electricity, and heart pacemakers are price inelastic.

Tactical Pricing

Tactical pricing is the ongoing stream of pricing decisions the firm makes daily.

Pricing Toolkit

A set of pricing tactics for the firm to change a product's price.

Vision

A description of an ideal future state; an impressionistic picture of what... Continue reading "Key Business Concepts: Pricing, Control, and Performance" »

The Depression led to a loss of confidence in the economic future and major political changes. In the 1932 presidential election, Franklin D. Roosevelt (Democrat) swept to a landslide victory over Herbert Hoover (Republican). FDR argued that the Depression was due to faults in the capitalist economy and proposed government intervention to remedy the situation. FDR had been confined to a wheelchair since an attack of polio in 1921, and his long battle to rebuild his career had deepened his empathy with human suffering. He was the first president of the radio age and understood the importance of transmitting confidence.

The New Deal programs (1933-39) aimed to stabilize the economy, regulate commercial institutions, create internal demand, and... Continue reading "The New Deal Era: Government Intervention and Economic Stabilization" »

Why is marketing such an important function in most organizations?

Marketing is a vital business function necessary in nearly all industries, whether the organization operates as a for-profit or as a not-for-profit entity. For the for-profit organization, marketing is responsible for most tasks that bring revenue and, hopefully, profits. For the not-for-profit organization, marketing is responsible for attracting supporters or customers.

Market Research in Management Decisions

What part can market research play in management decisions on product/service design?

Market research is the planned, systematic collection of data designed to help management take decisions about each operation and to monitor the results of those decisions to understand... Continue reading "Essential Marketing Functions and Business Strategy" »