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

The Growing Threat of Natural Disasters

It is widely known that natural disasters such as hurricanes, landslides, and earthquakes can have devastating effects on communities worldwide. Furthermore, as climate change exacerbates the impact and intensity of these events, addressing their root causes and adopting preventive measures becomes essential to reduce their devastating effects.

Immediate Consequences: Destruction and Loss

Natural disasters often result in widespread destruction and loss of life. According to recent reports, floods can sweep through regions, claiming dozens of lives and displacing thousands of residents. Entire neighborhoods can be submerged, and critical infrastructure is severely damaged.

Economic Repercussions and Recovery

Assessing Readiness to Internationalize

To assess readiness to internationalize, consider the following:

1. Analyze Organizational Readiness

   Examine business strengths and weaknesses relative to international business by evaluating key factors such as appropriate financial and tangible resources, relevant skills and competencies, and commitment by senior management to international expansion.

2. Assess Product/Service Suitability

   Systematically assess the suitability of the firm's products and services for foreign markets. Evaluate the degree of fit between the product or service and foreign customer needs.

Bargaining Power & Entry Mode Selection

A high-control entry mode is likely to be selected when:

• The host government strongly desires to attract

Canvas Model

Customer Segments

A company supplies products and services to one or several customer segments. Who are the customers? (Proveedores)

Value Propositions

Why should our customers buy our products (or services)? Which outstanding benefits do customers get? Do we fulfill their real needs?

Channels

Value propositions (not just products) are delivered to customers through several channels: communication, distribution, sales, etc.

Customer Relationships

What kind of long-term relationships does the company establish with the customer segment? How?

Revenue Streams (Income)

Revenue flows (i.e., money) represent the money customers would pay for the business's products or services.

Key Resources

Key resources encompass everything the company needs to... Continue reading "Understanding the Canvas Model and Marketing Plan" »

Key Macroeconomic Concepts Explained

Core Definitions

Net Taxes (T): Taxes – (government transfer income and interest payments)

Inventories (INV): Goods produced but not yet sold.

The Basic Macroeconomic Equation

The basic equation of macroeconomics represents total spending in the economy:

GDP = C + I + G + (X-M)

Where:

• C = Consumption
• I = Investment
• G = Government Spending
• X = Exports
• M = Imports

Understanding GDP and Related Measures

Concepts Related to GDP

• Final Sales of Domestic Product: GDP – change in inventories.
• Gross Domestic Purchases: GDP – (X-M).
• Gross National Income (GNI): Formerly known as Gross National Product (GNP). Takes an ownership approach instead of a geographic approach to define the production of a nation. Example: how to count

External Analysis: To detect Opportunities and Threats

Internal Analysis: To discover Strengths and Weaknesses

PEST Analysis: used by organizations to discover, evaluate, organize, and track macro-economic factors which can impact on their business now and in the future

Political • Change to the political system very often forces business to change its approach. Economic • Changes in the market conditions, such as the presence of new competitors, or simply changes in the economy. Social • Changes in society or culture, such as demographic change, Technological • Technological innovation can force changes in production techniques

SWOT: done to try to access the CURRENT & FUTURE situation of a product, brand, business… (at the beginning... Continue reading "Strategic Analysis and Planning for Business Growth" »

Chart of Accounts

This system codifies business transactions with an account number and name. Accounts are hierarchically ordered:

• Groups (1 digit): Seven primary categories.
• Subgroups (2 digits): Subdivisions within groups.
• Accounts (3 digits): Specific items within subgroups.
• Subaccounts (4 digits): Detailed breakdown of accounts.

Group Examples:

1. Basic Financing
2. Non-Current Assets
3. Inventories
4. Trade Payables and Trade Receivables
5. Financial Accounts
6. Purchases and Expenses
7. Sales and Income

Static vs. Dynamic Financial Views

Net Worth (Static Vision)

• Economic Structure: Assets
• Financial Structure: Liabilities and Equity
• Balance Sheet: Fundamental accounting identity (end of period)

Net Income (Dynamic Vision)

• Resource Generation: Revenues
• Resource Consumption: Expenses
• Income

Business Ownership and International Markets

Most businesses are owned by foreign companies or use markets/suppliers in other countries. Methods of international business involvement include:

• Owning a retail or distribution outlet in another country.
• Owning a manufacturing plant and exporting.
• Importing from businesses in another country.
• Investing in businesses in another country.

Historical Context and Emerging Markets

First Tier Trade Partners (1st TTP): French and British. Asia during World War II.

Three Emerging Markets: Middle East, Africa, India, and South America.

Example: Morocco exports clementines. Canada has a weak manufacturing sector.

Industrial Sectors Defined

Second Industry: Adds value by creating finished goods from raw materials extracted... Continue reading "Canadian Economy and Global Business Interactions" »

Unit 4: Cost Allocation and Imputation Itinerary

1. Methodologies for Cost Location

1.1. Based on Functions and Departments

The location of costs, or the itinerary of imputation, aims to find the entity that originates the cost.

In accounting for the presence of indirect costs—which measure resource consumption that cannot be directly traced to the product—it is necessary to find a way of estimating the relationship between the volume of costs and the volume of production. The solution is to set an itinerary of imputation, with different stages represented by cost centers, determining the relationship between resource consumption in the center and the different costs. Costs could be directly allocated to sections or centers or indirectly, using... Continue reading "Cost Allocation and Imputation Itinerary" »

Ethical Business Conduct

T6- "Do to others as you would like them do to you". Business ethics involve describing inappropriate behaviors (taking gifts, bribing government officials, misrepresenting data, discriminatory practices, boycotting third parties). Maximization: Produce quality products at low costs. Codes: Control ethical behaviors (have employees adopt standards, write contracts that align interests, write codes of ethics, and provide training).

Financial Management

T7- Goal: Maximize shareholder wealth. Financial management in a typical corporation: Board of directors – Chief Executive Officer (CEO). The CEO oversees the (A) Chief Operating Officer (COO) and (B) Chief Financial Officer (CFO). The CFO is responsible for the (Bi) Controller... Continue reading "Business Principles: Ethics, Finance, Marketing, HR, and Operations" »

MPO: Management, Planning, and Organization

Goals

Goals are defined as the long-term strategic aims of the organization. Examples include consumer goals, product goals, operational goals, and secondary goals.

Objectives

Objectives are defined as the things a business wants to achieve in a certain time frame. Examples include business survival, maximizing profit, maximizing sales, boosting customer satisfaction, and expanding the business.

Policies

Policies are defined as the framework and structure a business works within. Examples include legal policy, human resources, health and safety policy, promotion and employment policy, and recruitment policy.

How They Contribute to Effective Management

• Goals provide a long-term look at what the company wants