Economic Characteristics of Colombia Describe the Economic characteristics of Colombia (the country)
The essay must include the following:
List current values for:
a)GDP, GDP growth and GDP per capita;
b) Provide GDP composition – that is: consumption, investment, government expanding and net exports
as a share of GDP.
Economic Characteristics of Colombia
c) provide the share of agriculture, manufacturing, and service out of GDP.
Identify resource endowment for the country and source of comparative advantage. List the endowment on a relative basis, e.g.: Venezuela ranks 1 in the world with proven oil reserves; Chile is number 1 in the world producing copper. Brazil is number 5 in the world with largest amount of arable land and number 5 with the largest labor force.
e) unemployment,
f) inflation,
g) currency and exchange rate regime
h) Main trade partner for export and import
i) Main import and export products
Describe the economic situation of the country in the past (as far back as you can find information).
Refer to relevant economic development periods, such as colonization, import substitution, debt crisis.
Provide any data from the past as you can find. Relate the impact of past economic events identified in the previous point to the current economic circumstances of the country.
Do not use complicated sentence structure and complicated vocabulary. The essay must provide the information above in a straightforward, organized manner. This essay will pass through an advanced plagiarism detection software, make sure all work is cited correctly.
The information can be found on the following websites:
SUGGESTED WEB LINKS FOR YOUR RESEARCH
1. Center for Latin American Studies Publications – http://www.latam.ufl.edu/LABE/publications.stm
2. The Federation of International Trade Associations: http://fita.org/countries/la.html
3. “A decade of structural reforms in Latin America; what has been reformed and how to measure it”, Lora, Eduardo,
2001 (old but very good): http://www.iadb.org/res/publications/pubfiles/pubWP-466.pdf
4. Economic Commission for Latin America and the Caribbean (United Nations- ECLAC portal):
http://www.eclac.cl/default.asp?idioma=IN
5. The Peterson Institute for international economics: http://www.iie.com/
6. The CIA world factbook: https://www.cia.gov/library/publications/the-world-factbook/index.html
7. The World Bank: http://www.worldbank.org/
8. The Inter-American Development Bank: http://www.iadb.org/
9. Good source of news: Latin American Herald Tribune: http://www.laht.com/Index.asp
10. IMF (Data Mapper): http://www.imf.org/external/datamapper/index.php
11. Food & Agricultural Organization of The United Nations: http://faostat.fao.org/site/291/default.aspx
The impact of Oil Price Drop on Companies Order Instructions: (The problem) The topic that I chose
The impact of an oil price drop on GCC countries, governments, companies and individuals
The impact of Oil Price Drop on Companies
Research methodology can help to define the activities of research, how to proceed with the research, how to measure progress and how to determine success. This week you explored how different epistemologies relate to particular research methodologies and the highlights of some methodologies in use today. In this Discussion, you will evaluate existing methodologies and explore the methodology that you will use for your dissertation.
To prepare for this Discussion, identify two or three journal articles that address research problems similar to the problem you have chosen, and evaluate the methodology used to conduct the research. With these thoughts in mind, in an 850-word response, post your answers to the following questions to the Discussion Board by Saturday:
How has your problem or question been studied in the past?
What methodology would be most useful in addressing your research problem or question?
Defend your choice of methodology. Discuss whether you would use a research design and approach similar to those you reviewed, or approach your problem differently and why.
The impact of Oil Price Drop on Companies Sample Answer
Research Methodology: The impact of an oil price drop on GCC countries, governments, companies and individuals
In this paper, three peer-reviewed journal articles that address the research problems like the research problem I selected are identified. The research methodology utilized to carry out the study as described in these three research articles is evaluated. In essence, the existing methodologies are evaluated and the methodology that I will use for my dissertation is explored.
How the problem has been studied previously
Content analysis methodology
In his study, Hvidt (2013) employs a comparative and empirical approach to analyze the future trends and the previous record of economic diversification in the 6 member states of the Gulf Cooperation Council (GCC). The author applied content analysis methodology and studied potential future diversification trends from existing national visions and development plans published by the governments of the GCC states. According to Hvidt (2013), diversification is a vital means of securing both the sustainability and stability of income levels in the future. Diversification involves reinvigorating the private sector and therefore it calls for the execution of wider reforms. Content analysis methodology as employed in the study by Hvidt (2013) is essentially a research methodology that is utilized in making valid and replicable inferences through interpreting textual material and coding it. Through evaluating texts such as graphics, oral communication, and documents in a systematic manner, qualitative data could be transformed into quantitative data (Williams 2011).
Statistical analysis methodology and The impact of Oil Price Drop on Companies
In another study, Ahmed (2015) investigated if the United Arab Emirate’s diversification strategies are sufficient enough to manage the country’s economic development. Ahmed (2015) used statistical analysis procedure as the methodology for examining the contribution of diversified sectors basing upon the Gross Domestic Product of the United Arab Emirates particularly during and following the 2008-2012 global financial crisis. Statistical analysis methodology is an essential method for getting approximate solutions whenever the actual process is unknown or very intricate in its true form. Statistical analysis, as Williams (2011) pointed out, is a part of data analytics. The researcher collects and scrutinizes each data sample in a set of items from which samples could be obtained from. It is notable that a sample refers to a representative selection which is drawn from a total population. The findings of the study by Ahmed (2015) revealed that investing in various sectors instead of oil would have improved the performance of UAE’s economy significantly.
Case study methodology and The impact of Oil Price Drop on Companies
In his study, Edwak (2012) used a case study methodology to examine Libya’s oil dependency and how this North African oil-producing country can diversify its economy so that it does not rely solely on oil exports as the only revenue source. According to Edwak (2012), the economy of Libya is heavily dependent on growing revenues from oil, which could actually deteriorate in the event of a drop in oil prices in the future. The economy of Libya could be affected adversely considering that in the global market, oil prices typically fluctuate widely. Even though in the coming years Libya could increase its oil production and revenues considerably thanks to its sizeable oil reserves, Libya’s dependence of public finance on just one sector implies that shocks threaten the financial balance and stability of the economy of Libya.
To avoid over-reliance on the oil sector which could really hurt the economy when prices drop and when demand declines due to the proliferation of alternative sources of fuel, the Libyan government should foster and encourage the growth of the non-oil sectors and stimulate economic diversification. Through the use of case study research methodology, Edwak (2012) carried out a detailed study of a specific situation – in this case how Libya is highly dependent on oil and how Libya can diversify so that its economy is not adversely affected by a drop in oil prices or a decline in demand – instead of an extensive statistical survey. Case study methodology is generally a detailed investigation of a single community, event or group. It is notable that case studies are an ideal methodology when an in-depth, holistic investigation is required (Williams 2011). For the study by Edwak (2012), a case study entailed a detailed investigation of a single country – Libya.
Most useful methodology in addressing the research question/problem
I would not use the research methodology similar to those reviewed; I would use a different methodology. In addressing the research problem of the proposed research, the most useful methodology that would be used is the positivist approach and gathering data through the use of open-ended interviews. The study will take on the positivist approach in establishing the impact of oil price decline on GCC member states, governments, business organizations, as well as individuals (Sang, & Seong-Min 2013). In particular, this research study would assume the onion research approach which depicts the layers that are involved in the research study. The fundamentals of the positivist viewpoint in the proposed research study determine the independence of the study and its influence that is value free. Positivism sees the element of knowledge as a facet which decreases the phenomena into simple facets which clearly depicted the general policies of the study (Toksoz 2012). The response of this study revolves around the views of the stakeholders including governments, nationals, residents, and states within the GCC member states. Given that there are various stakeholders, the aspect of critical realism would be initiated to answer the research questions of the study and take an analysis of the situations. Qualitative interviews would be carried out for the purpose of ascertaining a holistic representation of the study from all the stakeholders involved in the oil/gas industry.
The impact of Oil Price Drop on Companies References
Ahmed, ZE 2015, The role of diversification strategies in the economic development for oil-depended countries: The case of the UAE. International Journal of Business and Economic Development, 3(1): 1-11
Edwin, AA 2012, Oil dependency, economic diversification, and development: A case study of Libya. Middle East Journal, 31 (4): 85–102.
Hvidt, M 2013, Economic diversification in GCC countries: Past record and future trends. London: London School of Economics.
Sang Hoon, K, & Seong-Min, Y 2013, ‘Return and Volatility Transmission Between Oil Prices and Emerging Asian Markets’, Seoul Journal Of Business, 19, 2, pp. 73-93, Business Source Complete, EBSCOhost, viewed 7 June 2016.
Toksoz, M 2012, ‘The Gulf Cooperation Council and the global recession’, Journal Of Balkan & Near Eastern Studies, 12, 2, pp. 195-206, Academic Search Premier, EBSCOhost, viewed 7 June 2016.
Williams, C 2011, Research Methods. Boston, MA: The Clute Institute.
This paper will follow order# 114243 Selling a project to the right management is critical to its survival and overall success.
Purpose: From the project from order# 114243, support for this project and the projects standing in the strategy of the business. Elaborate on how you will develop and implement the process to convince management of its promising benefits and operational effectiveness.
Description: Answer the following discussions:
Now that you have identified critical information over the previous weeks do you see any risks in selling this project to your management team? Explain
You have indicated whether this project fits the strategic plan for the business.
IF this project fits the strategic plan, explain how you plan to present this project to your management?
IF this project does NOT fit the strategic plan, explain how you plan to present this project to your management
SAMPLE ANSWER
Selling Project to the Management
Introduction
Management survival and success is to a great extent influenced by the ability to sell the project to the right management. To achieve this, the project must be feasible and present undisputable benefits and demonstrate operational effectiveness. The project should also be aligned with the organization’s strategic plan and hence ensure that it adds value to the organization. This paper details how I will convince the management on the potential benefits and operational effectiveness of the Samsung Galaxy A10 project. This involves the development and implementation of the process of convincing the management.
Risks in selling the project
Selling the project to the management presents various risks, mostly based on how strategic the project is in relation to the organization’s goals and objectives. There is the risk of having the project rejected by the management if it is not considered feasible enough to warrant funding. Such decisions are informed by factors such as return on investment, presence of more promising projects and management judgment among other factors. Shenar & Dvir (2013) note that at any particular time, managers have to make a decision based on numerous project proposals.
The second risk is that the project may not be within the company’s immediate goals and aspirations. Samsung implements numerous projects depending on what is considered most strategic for the company to compete effectively. If the company’s objective is to promote its electronics business for example, the likelihood of a mobile phone project being funded may lower than a project for developing new television technology. The company’s priorities thereby determine the feasibility of the project. Unfortunately, mobile phone technology is phased out quickly and therefore the project cannot be effectively pushed forward to a later date and it would therefore remain fruitless.
The third risk is that the associated cost may limit the company from investing in the project. This would render the project futile, despite the efforts invested towards its development. Hulett (2012) notes that managers are often biased towards costs and the likelihood of judging the project based on costs are high. This means that the presentation must be convincing enough to make managers look beyond costs and instead consider the impact and future potential of the project. In the event that managers are more concerned about the project cost but find the idea worthwhile, the budget may need to be adjusted, which may impact on certain project parameters.
The ability of the plan to communicate the impact and show costs versus benefits is of great importance. In presenting the project plan, this may not come out as effectively as it should and this presents a risk of the management not understanding the process well (Swathi, 2015). This is the fourth risk and which is mostly associated with the presenter’s ability to connect with the audience, such that what is presented is interpreted in the intended manner. If the management for example fails to capture the idea and justification, the project may end up being rejected. This may also be influenced by personal factors such as bias towards certain technology and past experience with similar projects.
Project presentation plan
This project aligns well with Samsung’s strategic plan, which seeks to provide customers with the highest quality products and the latest phone technology. This insinuates that the project plan involving the production of Samsung Galaxy A10 will be well embraced by the management. It is however important to note that managers are presented with numerous projects, all with high potential to positively impact the organization’s bottom line. Accordingly, the presentation must appeal to the management based on its ability to contribute to the organization’s performance and its feasibility (Maley, 2012). In this regard, demonstrating the alignment of the project to the organization’s strategy is imperative. The presenter’s zeal and passion also contributes significantly to the management’s decision on the project. In this relation, I intend to present the project to the management as detailed below.
The first thing is to prepare effectively for the selling meeting. This includes understanding the project concept and processes, identifying the managers who will be present at the meeting and thinking about potential questions and queries that they may have (Duarte, 2012). Swathi (2015) notes that the trick is to be adequately prepared for the presentation by mastering the facts of the project including the project plans and deliverables, budgets, timelines, risk analysis, possible challenges and how these factors influence the organization’s position.
Besides understanding the components of the project, I will ensure that I demonstrate the knowledge on the problem, which is keeping up with competition, meeting customer growing needs and enhancing profitability; and the solution, which is producing a phone with improved capabilities such as the A10. I will ensure that I effectively demonstrate how the benefits associated with the project are likely to impact on the organization’s profitability. It is at this point that I will indicate how the project feeds into the organization’s strategy. As noted by Maley (2012), a project is more likely to be accepted if it contributes to the company’s strategic goals; hence the reason why it is considered an important aspect when selling a project to the management.
An important factor to consider is to ensure that the management fully understands the value addition potential of the project (Shenar & Dvir, 2013). Quality, customer satisfaction and industry leadership are major concerns for Samsung. A project that promises to improve these aspects is therefore likely to receive positive feedback from the management. In this regard, I would make quality and customer satisfaction my focus; indicating how the project would lead to significant growth in the market share based on the high quality and unique smart phone. To further justify the A10 project, I would demonstrate the phone’s superiority to competing brands and how this would ensure that Samsung can compete effectively in the smart phone industry. A comparison of various smart phones in the same category would serve the purpose of demonstrating how the A10 will compete in the market. This approach is considered effective because it makes major strategy objectives and potential value addition the focus of the presentation.
In presenting the project, it is important that I make the management aware of overall project risks and challenges that are likely to affect the timeline. This should also include the mitigation plans to ensure that the project is successfully completed. Being open about the project shortcomings ensures that the management anticipates such challenges, as opposed to where the presentation only shows the perfect side of the project, only for the challenges to emerge when the project is underway (Thamhain, 2013).
Making a presentation and answering questions may not always be enough to provide adequate information regarding the project. Therefore, I plan to come up with reference documents that can be distributed to the panel for further reference. The documents will provide the information presented in details and with additional models and graphical presentations.
It is important that I leave the management convinced about the project and my presentation must therefore end with a reemphasis of the project’s contribution to the company. This will involve repeating the project goals and objectives and how its implementation will influence the company’s ability to compete effectively in the smart phone market.
To ensure that I address the management questions effectively, I intend to familiarize myself with all the project details, including mitigation plans for possible challenges that are likely to be picked from the presentation (Soriano, 2012). This may be anticipated through prior circulation of the project document to the concerned managers and asking them to make comments on possible issues that they would like to be addressed.
Conclusion
It is clear from this discussion that convincing managers to accept a project can be a daunting task and the presentation must be done in such a way that it is highly persuasive. This includes demonstrating the impact of the project to company strategy and future performance. This discussion also establishes that there are various risks that could emerge the presentation of the project; thus limiting the management’s ability to adopt the project.
In developing the presentation, I will ensure that I emphasize on how the project will affect quality, customer service and profitability. I will also ensure that I am well prepared by understanding all aspects of the project and answering all queries and concerns effectively. Finally, reemphasizing the relevance of the project to the company’s strategic objectives will play an important role in ensuring the managers are well convinced.
References
Duarte, N. (2012). How to Present to Senior Executives. Retrieved from
Swathi, T. S. (2015). The Importance of Effective Presentation for Organizational Success. IUP
Journal of Soft Skills, 9(2), 7-21. Retrieved from eds.a.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=7&sid=ba93f0fb-01b2-4504-8bd5-4cf308c0a6e4%40sessionmgr4002&hid=4108
Thamhain, H. (2013). Managing Risks in Complex Projects. Project Management Journal,
44(2), 20-35. doi:10.1002/pmj.21325. Retrieved from eds.a.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=290126a3-af89-4de8-a534-9d871089f2a1%40sessionmgr4002&vid=1&hid=4108
Information Technology and Economic Development Order Instructions:
Information Technology and Economic Development
This week the writer will be submitting a high-level summary of potential research topics of which will be submitted to the Instructor, who will reply with feedback and suggestions for you to integrate into your work.
It is very important for the writer to understand that this will be an ongoing paper and for this week he/she will only be submitting a high level-level summary or potential topics. The information below is just to guide the writer to understand what will be expected of the paper later next week when he begins written the paper. It is also important for the writer to take into consideration that for the topic for the doctoral study will be “Effects of Human Resource practices on employee performance”. With this in mind, the writer will be able to select potential research topics as noted above in the first paragraph of this order form.
Information Technology and Economic Development Final Paper
Write a paper that addresses relevant theories and empirical research leading to a significant research topic, problem, and question. Approach your topic providing an academic argument for funding that might support a vital new step in program and portfolio management. You do not have to actually design a study to the point of specifying research measures of effective program and portfolio management or specify samples, but try to evolve your thinking to the point of framing a relevant research topic, problem, and question on which your proposed research would be focused.
This question should be complete enough to suggest the development of an important theory, address a gap in a current model, or demonstrate an immediate application for solving common organizational problems. Rather than attempting to include as many references as possible, try to emphasize the logical coherence of your evidence of conceptual foundations. Build an academic argument explaining why your research problem and question are important. An obvious extension of your paper would be to use it as a springboard for a doctoral proposal. Your paper also could be useful in developing Chapter 2 of your proposal and doctoral study completion.
Your Final Paper should adhere to APA format (6th edition), which requires a title page, a reference list, and appropriate sections and their headings, and should include the following elements:
• A thorough review of the literature (minimum of 20 resources) that shows evidence of a potential research opportunity or gap that has not been discussed in the academic literature
• A draft problem statement
• At least one broad research question that is demonstrably linked to your problem statement
You do not need to address any hypotheses or design considerations.
Information Technology and Economic Development Sample Answer
Introduction
It is essential to determine the fact that success remains the ultimate goal of every project. Extensive research studies have been developed with the aim of establishing the key factors that are essential in determining project success and failure (Allen, Alleyne, Farmer, McRae, & Turner, 2014). This, therefore, gives an empirical understanding that the project management process remains a complex element that requires extensive and collective attention of several aspects of human, technical and budgetary variables.
Additionally, projects hold specialized critical success factors that if carefully addressed, improves the likelihood of successful implementation. This paper, therefore, seeks to develop a research topic that identifies the factors that may lead to the success or failure of a project (Allen, ert.al .2014). Considering the fact that it is a conceptual paper, a framework that identifies the factors that drive success within a project will be reviewed. This framework will therefore be tested empirically through the use of data from several industries.
Research Topic
The use of project management approaches has over time raised to prominence, a factor that has seen projects viewed as critical to the economic growth or several industries. The rationale behind the rise of project management is typically attributed to the changes that occur due to new challenging environments and opportunities that are brought by technological developments, the dynamic market conditions, the shifting boundaries of knowledge, changes in environmental regulations, increase in customer involvement and the increase in scope of the inter organizational relationships (Besteiro, Souza, & Novaski, 2015).
Several businesses today are operating under a higher level of uncertainty, with project implementation bound to several external influences, the ever growing requirements, unexpected events and the fluctuations in resource flows. This clearly indicates that in an event where projects are applied and some steps are not taken into consideration in managing them effectively and efficiently, the probability of their failure remains high (Cao, & Swierczek, 2010). Several research studies have noted and identified the common problems that are associated with the management of projects. Some of the problems identified include the lack of project management skills, poorly defined objectives, insufficient resources, high staff turnovers, poor follow up approaches and insufficient authority given to project managers.
As determined, it is therefore crucial to determine that the emerging importance o9f projects and the widespread initiation of projects within organizations in multiple sectors remains the key driving force in a research that seeks to determine the factors that influence the success of a project (Todorović, Mitrović, & Bjelica, 2013). This therefore makes it essential to determine the factors that contribute to the success or failure in the implementation of a project and to identify the elements that remain relative in the life cycle of a project. This study will therefore emphasis and provide an analysis into the following research topic;
What are the key factors that contribute to the success and failure of a project in the manufacturing sector?
What are some of the criteria’s that can be utilized in measuring the success or failure of a project within the manufacturing industry?
Information Technology and Economic Development Conclusion
It is therefore imperative to determine that this study will determine the factors that are key in the success and failure of a project (Todorović, et.al. 2013). The rationale behind the rise of project management is typically attributed to the changes that occur due to new challenging environments and opportunities that are brought by technological developments, the dynamic market conditions, the shifting boundaries of knowledge, changes in environmental regulations, increase in customer involvement and the increase in scope of the inter organizational relationships.
Information Technology and Economic Development References
Allen, M., Alleyne, D., Farmer, C., McRae, A., & Turner, C. (2014). A Framework for Project Success. Journal of Information Technology & Economic Development, 5(2), 1-17.
Besteiro, É. C., de Souza Pinto, J., & Novaski, O. (2015). Success Factors in Project Management. Business Management Dynamics, 4(9), 19-34.
Cao Hao, T., & Swierczek, F. W. (2010). Critical success factors in project management: implication from Vietnam. Asia Pacific Business Review, 16(4), 567-589. doi:10.1080/13602380903322957
Todorović, M., Mitrović, Z., & Bjelica, D. (2013). Measuring Project Success in Project-Oriented Organizations. Management (1820-0222), (68), 41-48. doi:10.7595/management.fon.2013.0019
Economic Factors Influencing RBTTs Marketing Strategies Order Instructions: You will be required to undertake an individual written paper related to a particular organization of your choice.
This organization can be one you work for or one you are
familiar with. The overall aim is to evaluate ways in which changes within the global
economy might impact marketing strategies and activities.
You will be assessed on your ability to:
A. Within a potential future economic scenario, critically evaluate the company’s
strategies for sustainable competitive advantage, segmentation (including
targeting and positioning) and branding
B. Using the same future economic scenario, critically evaluate the potential impact
of the company’s strategies on customer behaviour
C. Identify and critically assess opportunities for growth within the organisation’s
MACRO environments
D. Make clear links to the marketing theory that underpins your work
E. Write a logical, well-presented and accurately referenced piece of work
The length of the report will be 2,500 words +/- 10%. The word count limit is there to test
your skills of conciseness and focus – keep your work relevant to the subject matter.
Key sections with suggestions as to word count:
Contents Approximate
Word Count
1. Brief summary statement of economic
factors your chosen company will operate in ( 200 words)
2. Potential impact on marketing strategies
under the following headings: ( 1400 words )
• Competitive advantage
• Segmentation, targeting and positioning
• Branding
3 Potential impact on customer behaviour and
how it might change ( 400 words )
4 Identify 2 specific growth opportunities in the
company’s macro environments and set out
what the company should do to take
advantage of these ( 500 words )
5 Bibliography (not included in the wordcount)
You will be awarded marks for each of the above sections from with weightings
applied to each.
Submission instructions:
You must submit ONE SINGLE FILE written in Arial 12 with one and a half (1 ½ ) spacing
and the text should be justified.
Note: This is a marketing project and not an economics project. Your marketing lectures will
cover the theoretical content and higher marks will be awarded for.
NB. Please write on businesses in the Caribbean e.g. telecommunication companies ( Cable and Wireless or Digicel or Flow) Banks e.g RBTT, CIBC FirstCaribbean, Bank of Nova Scotia, or Supermarkets ( Super J) ( All business listed are found in the Caribbean)
A Brief Statement of Economic Factors the will Influence RBTT’s Operations…………..4
Analysis of the Potential Impact of Global Economy Changes on RBTT’s Marketing Strategies…………………………………………………………………………………..4
Competitive advantage…………………………………………………………….5
Segmentation, targeting and positioning…………………………………………..6
Positioning…………………………………………………………………………7
Analysis of the Potential Impact of Global Economy Changes on Consumer Behaviour and Possible Change Trends………………………………………………………………8
Growth Opportunities in RBTT’s Macro Environment and the Potential Competitive Advantage…………………………………………………………………………………9
Conclusion……………………………………………………………………………….11
References……………………………………………………………………………….12
Introduction
As global economy conditions continue to change rapidly and the international market becomes highly competitive, organisations ought to embrace appropriate marketing strategies in order to gain competitive advantage over their competitors. According to Laermer and Simmons (2007) definition of marketing strategy encompasses both long-term and short-term activities dealing with the analysis of an organisation’s initial strategic position, evaluation and selection of marketing approaches that are market-oriented subsequently enabling the organisation goals as well as its marketing objectives to be achieved (Homburg, Kuester and Krohmer, 2009). This paper evaluates ways in which global economy changes might impact upon marketing strategies and activities of RBTT within the Caribbean region. The paper is organised into four main sections covering the keys features that characterize the marketing strategies and activities undertaken by RBTT in order to achieve a sustainable competitive edge in the market. First, a brief summary of economic factors RBTT will operate in are stated. Second, potential impact of changes with global economy on RBTT’s marketing strategies in terms of competitive advantage, market segmentation (i.e. targeting and positioning) as well as branding are is discussed. Third, potential impact of changes with global economy on RBTT’s customer behaviour and its possible change is also discussed. Fourth, two specific growth opportunities in the RBTT’s macro environment are identified and a discussion of how they can be exploited to the bank’s advantage discussed. Finally, the paper concludes by highlighting the importance of aligning RBTT’s marketing strategies and activities for its advantage.
A Brief Statement of Economic Factors that will Influence RBTT’s Operations
RBTT is among the largest banks in the Caribbean and through its extensive banking network it offers diverse financial services by providing commercial and personal banking, investment and corporate banking, wealth management, asset and trust management as well as insurance services (RBTT, 2015). The bank also serves a wide range of clientele including individuals, small and medium enterprises, governments as well as multinational and regional corporations (RBTT, 2015). However, the bank operates in a region and economy sector characterised by numerous economic factors that are likely to vary with changing global economy. This is attributed to the fact that, economic factors constitute some of the basic elements that influence businesses’ financial matters such as interest rates, taxation, labour, government policy and management (Aaker, 2008; Shaw, 2012).
As a result, changes in economic factors are often accompanied by variations in interest rates (i.e. the money charged on loans). Subsequently, there is a direct effect of changes in interest rates on the total or overall prices to be paid on products by borrowers. This means that interest rates determine when, and whether, they will influence consumer purchases of homes, furniture, land, cars, as well as other items likely to be bought on credit. There are usual increases of interest rates during inflation periods, and inflation is a common phenomenon in the Caribbean region and is expected to influence RBTT’s marketing strategies in the market (Baker, 2008).
Analysis of Potential Impact of Global Economy Changes on RBTT’s Marketing Strategies
According to Aaker (2008) the thought of loosing competitive advantage over competitors is the cause of greatest fear the management of any business organisation can fathom. Hence, as changes within the global economy continue to unfold, businesses devise innovative marketing strategies and effectively implement them through feasible marketing plans that are excellently prepared (Baker, 2008). As a result, RBTT’s marketing strategies as well as activities to implement them will be potentially impacted by changes within the global economy (Homburg et al., 2009). Thus, the need for RBTT to make the necessary amendments on its marketing strategies and activities for continued competitive advantage over its competitors in the Caribbean’s banking sector will be inevitable.
In particular, potential impact of global economy changes on the marketing strategies adopted by RBTT will be manifested in three critical aspects such as competitive advantage, market segmentation (through targeting and positioning) as well as branding. Analysis of such potential impact is discussed as follows:
Competitive advantage
RBTT can leverage of the existing environmental factors to achieve competitive advantage. For instance, it can monitor its customer behaviour to develop appropriate marketing strategies for enhanced direct marketing. RBTT can seize available opportunities in the market to achieve a competitive advantage against its competitors in the banking sector within Caribbean region. For example, the bank can leverage on banking technologies to implement advanced information systems for increased operational efficiency and reduction of costs. In addition, RBTT can use technology to increase its utilisation of the Internet in developing new marketing strategies and innovative marketing plans including online advertising which is relatively cheap and efficient (Homburg et al., 2009). Hence, RBTT can innovatively use these banking technologies for its advantage to expand its customer base which is critical for the bank’s growth. Similarly, RBTT can innovatively develop new products and services to be in the forefront to satisfy emerging customer needs and this is an important strategy for the bank to achieve continued customer loyalty. As a result, RBTT can combine these growth opportunities to improve or diversify products and services for its advantage (Baker, 2008).
Segmentation, targeting and positioning
Market segmentation is undoubtedly one of the most powerful marketing strategies adopted by RBTT to ensure that it effectively services its customers in various segments of the market. In particular, RBTT offers a wide range of product assortment through its services and products ranging from credit facilities and current as well as saving accounts to automated and transfer services (RBTT, 2015). Three main services offered by the bank include: accounts (i.e. current accounts, savings accounts, saving plans, standard savings accounts, insured savings plans, and term deposits as well as youth savings account); general loans (i.e. study loans, travel/vacation loans, personal loans, asset purchase loans, mortgages as well as commercial loans); trade services (i.e. letters of credit, payment guarantees, performance guarantees, documentary collection, bid bonds as well as standby letters of credit); transfer services (i.e. international and local transfers, automatic transfers, money gram, pre-authorized automatic payments, as well as standing orders); card services issuance (master cards, Visa cards, debit cards as well as ATM cards such as Cirrus/Maestro); automated and electronic banking services including the RBTT Netbank; insurance (i.e. medical insurance, life insurance, pension insurance as well as car insurance); and finally personal banking and investment services (i.e. trading and investment advise). In addition, RBTT’s market segmentation is focused on three market segment such as mass clients, personal banking and corporate banking. Through these diverse products and services targeting different market segments to ensure that RBTT serves its varied clientele (RBTT, 2015).
Positioning is another important aspect of market segmentation and RBTT has embarked on an ambitious regional expansion strategy which ensures its products and services are closer to customers. To further its market positioning RBTT has adopted multi-channel approach in meeting it clients such promotion and advertisements which has enabled the bank to reach a wider population hence earning them the name Curacao (RBTT, 2015). For further strategic positioning in the market RBTT use ATM machines across the Caribbean region to enable people to conveniently deposit and withdraw cash at any time thus taking banking services closer to people (RBTT, 2015).
Branding
RBTT began its aggressive branding strategy instigated by the changing global economy and embarked on its expansion program by opening subsidiaries across the Caribbean region now carrying the brand RBTT (RBTT, 2015). Changes within the global economy have significantly influenced RBTT’s branding since it entered the Caribbean banking market. For instance, the marketing influences that have been critical for the bank have prioritised on promoting RBTT’s brand image in the market. In its branding strategy, the bank embraced the language of the market by changing its language from English to Dutch and Papiamento and also it continues with communication strategies that ensure that RBTT is in touch with its customers as a critical in promoting the bank’s branding strategy (RBTT, 2015). Furthermore, RBTT enhances its image in an ambitious branding strategy by implementing a new brand as well as logo (image) through donations (e.g. educational projects) and sponsoring (e.g. Curacao Little League) as strategies to ensure the bank’s brand is wide spread. RBTT’s sales approach by organising regular campaigns also significantly contributes to the bank’s branding. In addition, product innovations which results to development of new products and services play a crucial role in enhancing RBTT’s branding when customers associated them to the bank.
Analysis of Potential Impact of Global Economy Changes on Customer Behaviour and Possible Change Trends
A clear and succinct understanding of customer behaviour is the most valuable information any business should always have in order to be successful (Homburg et al., 2009). This is attributable to the fact that, across economy sectors customer behaviours tend to change especially on basis of prevailing changes within the global economy, which necessitates the need to track such changes through customer surveys to determine the underlying causes and undertake appropriate corrective measures (Baker, 2008). For instance, changes within global economy are likely to have potential impact on the behaviour of bank clients in terms of deposits, borrowing and seeking of other financial services and the trend of the impact may either change for better or worse depending on prevailing changes within the global economy. As a result, banks in general need to regularly conduct analysis the behaviour of their clients because this could be strategically helpful for the bank’s management in predicting or forecasting on whether the customer is active or non-active (Aaker, 2008). If customer behaviour analysis indicates that a considerable number of the bank clients are non-active or dormant, this acts as an awakening call for the bank to take up pro-active action targeted to such customers in order to keep them as stable and active customers of the bank in future by undertaking the necessary interventions to ensure they do not switch to competitor bank (The Marketing Donut, 2015).
Considering a foreseen inflation in the global economy, customer behaviour of RBTT’s clients will be potentially impacted. This is due to the fact that, the increase in interest rates which accompany inflation caused by changes in global economy reduces deposits and borrowing by customers as well as declining demand for other financial services attributed to tough economic conditions during periods of inflation (Shaw, 2012). As a result, in order for RBTT to mitigate the potential negative impact caused by the accompanying customer behaviour, there is need to always respond swiftly by developing appropriate incentives such as increasing loan repayment period, providing free consultancy services on viable investments, and devising targeted marketing directed to specific customer groups (The Marketing Donut, 2015).
This potential impact of global economy changes on customer behaviour might change depending on the direction the changes within global economy (Shaw, 2012). For instance, if the inflation period prolongs, the impact on customer behaviour trend might persist or continue to change for the worse; whereas if the inflation period ends, the impact on customer behaviour will definitely change for better. Thus, the management of RBTT within the Caribbean region should always ensure that the bank conducts regular analysis of customer behaviour with regards to changes within the global economy to monitor changes in customer behaviour so that when a negative trend is observed, appropriate marketing strategies are rolled out to mitigate the negative impact (The Marketing Donut, 2015).
Growth Opportunities in RBTT’s Macro Environment and the Potential Competitive Advantage
The ability of any business organisation to seize growth opportunities presented by the prevailing market or economic conditions is critical to achieving sustainable competitive advantage over its competitors in the market (Shaw, 2012). As a result, the seized growth opportunities catapults the business to higher heights compared to its competitors subsequently increasing its profits which eventually enable the business to strengthen its financial muscles. Over the years, RBTT’s operations in the Caribbean region have undergone tremendous growth and development financially, technically as well as in terms of human capital as a result of the bank’s ability and strategies in seeking out and indeed in creating or seizing growth opportunities presented by its macro environment in the interest of its staff, customers and shareholders (RBTT, 2015). However, there are numerous growth opportunities identified in RBTT’s macro environment but only two specific growth opportunities among those identified are to be discussed in this paper together with how the bank can take advantage of them in order to achieve sustainable competitive advantage against its competitors in the market. In particular, the two specific growth opportunities identified are: technological advancements in banking and development innovative/new products and services to meet growing customer needs.
Over the last few years, the banking sector has experienced tremendous technological advancements that have revolutionized the traditional way of doing things (Shaw, 2012). Hence, technological advancements in the banking sector within the Caribbean region and the world over present an immense growth opportunity for RBTT in its macro environment. Technology has over the years undisputedly being the engine of banking sector growth and development. Also, much of the research carried out on the influence of technology on growth of banks show that rate at which change occur in technology as well as market competition intensity are without any doubt the fundamental environmental factors that affect an organisation’s marketing strategies, functioning and performance. Hence, RBTT can leverage on the existing banking technologies to improve its operational efficiency, reduce labour costs, develop and launch new marketing strategies including online presence (Shaw, 2012). These outcomes of embracing banking technologies provide a growth opportunity for the bank because they can be utilised to increase the bank’s profitability and increase its customer base. The other growth opportunity for RBTT in its macro environment is the development of innovative products and services to meet customer needs including products such as tailor-made VISA cards as well as convenient payment services.
RBTT can seize these growth opportunities and take advantage of them to achieve a competitive edge against its competitors in the banking sector within Caribbean region. For example, the bank can leverage on banking technologies to implement advanced information systems for increased operational efficiency and reduction of costs. In addition, RBTT can use technology to increase its utilisation of the Internet in developing new marketing strategies and innovative marketing plans including online advertising which is relatively cheap and efficient (Homburg et al., 2009). Hence, RBTT can innovatively use these banking technologies for its advantage to expand its customer base which is critical for the bank’s growth. Similarly, RBTT can innovatively develop new products and services to be in the forefront to satisfy emerging customer needs and this is an important strategy for the bank to achieve continued customer loyalty. As a result, RBTT can combine these growth opportunities to improve or diversify products and services for its advantage (Baker, 2008).
In conclusion, the aligning RBTT’s marketing strategies and activities is important in ensuring that it achieves competitive advantage. For instance, the bank can leverage on the changing global economy in its market segmentation and branding to attain competitive advantage over its competitors. Furthermore, RBTT can monitor customer behaviour with regards to changing global economy and develop appropriate marketing strategies, while at the same time seizing growth opportunities in its macro environment for its advantage.
Shaw, E. (2012), “Marketing strategy: From the origin of the concept to the development of a conceptual framework.” Journal of Historical Research in Marketing, Vol. 4, No. 1, pp. 30–55.
Letter to the Editor on Economic Issue There is a checking system for similarity, it has to be original work.
Letter to the Editor on Economic Issue
The first assignment is a one-page letter to the editor. You will find letters in the print edition on the second page of the Op-Ed section, next to the
Editorial. Look over several articles from different issues of the WSJ before you begin to write your letter.
Today’s paper, Thursday, April 21, 2018, has five articles that illustrate what I am looking for in your paper. Look on page A14 of the print edition under
the headline “We Hear Fed’s ‘Mission Accomplished’ but It’s Not Over” for some good examples. The first letter cites the article that all of the writers
address. It briefly summarizes the issue under consideration, the Federal Reserve’s decision to reduce bond purchases. Make sure that the article you
reference also concerns an economic issue. The first three letters are especially good. Each presents evidence from other sources to support the writer’s
point of view. The writing in these letters is uniformly good. It is clear, concise and focused. Edit your work carefully and strive to emulate the approach
and presentation of these writers.
There are several good examples of letters to the editor in today’s (1/30) WSJ. Look under the headline “Some Americans Can Retire Comfortably, But Many
Won’t”. This refers to a recent article which argued that Americans have more savings and a better retirement outlook than most people think. Note that
letter takes a position on this economic issue and provides theoretical and/or empirical evidence to support that position.
Applying Economic Theory to Corporate Governance and Employee Performance Evaluation
Order Instructions:
Assignment #1 (1 page and 3 references)
Applying Economic Theory to Corporate Governance and Employee Performance Evaluation
Firms exist because they represent more or less optimal responses to a costly market contracting environment for both resource inputs and product outputs. At the same time, such optimal responses do not occur spontaneously. Rather, such responses require knowledgeable, competent managers who can develop and implement plans, while offering proper incentives to employees.
Whether you are a researcher, or an executive, or a consultant, you need to understand the economic theories that explain and predict what makes firms’ responses to costly market contracting factors as optimal as possible. This means, you need to be able to identify the conditions under which a firm is likely to create value and remain economically efficient.
In this Discussion, you will explore the basic dimensions and implications of such economic theories, as they apply to corporate governance and employee performance evaluation. You will also discuss how managerial accounting systems and methods can best serve the objectives of corporate governance and employee performance evaluation.
By Day 5 of Week 1, respond to at least two of the following questions:
1. What data would you use in analyzing corporate governance and employee performance evaluation systems, and why?
2. How do you categorize corporate governance and performance evaluation systems as optimal or suboptimal, and what criteria need to be used in the evaluation?
3. Why is an understanding of the economic theories underlying corporate governance and employee performance evaluation systems critical to understanding managerial accounting?
4. How would you apply economic theories of corporate governance and performance evaluation in resolving planning and control issues in organizations?
SAMPLE ANSWER
Applying Economic Theory to Corporate Governance
Q1. What data would you use in analyzing corporate governance and employee
performance evaluation systems, and why?
Corporate governance is about crating efficiencies for the firm. In this case, the data that would be most effective would come from sources such as sales data, production data and the human resources database (Daily, Dalton, & Cannella, 2003 ). The sales data can because to indicate a number of useful information such as how effective the sales force is. Point of Sale (POS) data for retailing firm can be useful in determine which shelf arrangements are likely to drive sales by. Production data can be used to determine which production strategy provides the most effective production in turn of productivity per employees and marginal costs as well as the elasticity of the production. HR database and payroll system can also be used by managerial accountants to determine the effectiveness and productivity of the firm’s labour force. If the firm is able to collect as much data as possible, this data can be used to do analysis to determine how efficiencies can be achieved in the firm (Klapper & Love, 2004).
Q3. Why is an understanding of the economic theories underlying corporate governance and employee performance evaluation systems critical to understanding managerial accounting?
Understanding of the economic theories and the underlying corporate governance as well as employee performance evaluation systems is critical to understanding managerial accounting. This is because managerial accounts need to be able to know which set up will bring in the most effective way of operations. Just like marketers try to understand consumer behaviour in order to know which sales methods, packaging style and other factors that will increase sales, managerial accounts need to understand which production strategies, operation strategies and corporate culture will help the firm to have the highest efficiencies. In general economics, a number of factors work together to determine how consumers behave and how much they buy. Having the best combination of these factors will help a firm in driving sales. As Manzoni and Islam (2009) point out, in corporate governance too, a number of factors within the organization determine issues such as the productivity, innovativeness and motivation of the employees. Having the best combination of these factors makes the firm effective.
References
Daily, C., Dalton, D., & Cannella, A. (2003 ). Corporate Governance: Decades of Dialogue and Data. ACADemy of MANAGEment REView, 1, vol. 28 , 3 371-382 .
Klapper, L., & Love, I. (2004). Corporate governance, investor protection, and performance in emerging markets. Journal of Corporate Finance, 10, 5 , 703–728.
There are two central aims of assessment via presentations. Firstly students have to engage in serious in-depth research on a, for most of them, novel topic. Aim is that the research can be done in a way, which allows the production of well-written supporting documents from which then a presentation can be derived. Secondly the presentations challenge students to deliver in a concise and appealing matter. Each student required to give one 20 minute (maximum) presentations
Critical Essay – 2, 500 words
Assignment Topic
CHINA THE NEW JAPAN.
Students have to engage in serious in-depth research on a specific topic from the course content. It is advised that the topic of the essay is in some relation to the presentations. Thus module leader and peer feedback can be taken into consideration. It is important that students learn to use a variety of high quality academic resources, including monographs, academic journals and databases. Students will learn how to write in a good academic style including correct referencing, citations and working with secondary sources. Novel ideas in research are strongly encouraged. Students will learn how to organise their overall workload, find solutions how to organise the time between research and writing and meet deadlines.
Assessment Criteria
– Viable research question/hypothesis
– Clear organisational structure
– Application of appropriate theoretical and methodological framework
– Excellent research skills
– Identification of relevant scholarly debates
– Clear, appropriate and critical application of theory to practice
– Persuasive communication of appropriately academic arguments
– Broad literature base
– Good understanding of the academic literature, including demonstrated capacity to provide relevant evidence
– Critical analysis
– Demonstrated understanding of how to reflect and the need to do so
It is strictly forbidden to use any free collaborative web-based encyclopedias such as Wikipedia, ask.com etc. Non-compliance results in a severe deduction of marks.
The essay should demonstrate that you are able to do independent research using the available academic literature (periodicals, monographs) and assess it critically and analytical. It is not recommended to use textbooks and non-academic online resources.
SAMPLE ANSWER
China the New Japan
Introduction
The paper evaluates the current economic power that China wields across the world; however, it equally establishes whether China’s rosy performance on the global stage will dwindle away just like Japan’s economic boom disappeared as a result of financial malpractices. Moreover, the article looks at some of the failures that led to the falls of Japan’s economic boom, while at the same time demonstrate that China has adopted the same policies that led to Japan’s demise. By and large, the paper outlines the historical performance of both economies with respect to their macro-policies. Political systems that have shaped the vibrancy that may have shaped both economies over time are also deliberated. Technology is another factor that features prominently in this paper. Ultimately, the paper adopts a critical analysis to argue facts home.
Learning from Japan’s Mistakes
The issue of whether or not China will become the next Japan is hard to tell. This is largely informed by the vitality of markets, so anything is expected. Three decades after a severe economic slump, Japan has lost its financial status to China. Regardless of the convoluted historical connection, China has imitated Japan in its strategy of economic growth. For instance the proper strategy of opening markets that presented a basis for internal foreign investment. Deng believed that such an attempt could contribute to the loss of management by Chinese Communist Party (CCP) following several years of economic decline and political anarchy. To adopt failed economic policies of Japan is a gravest of mistakes that China is doing. The world of finance is unpredictable and China may be in for serious financial woes if it does not take caution. While Japan seven decades ago, utilized a considerably low-wage workforce to produce goods so as to get foreign exchange for expanding the economy, it led to the overproduction of products which lacked the buyers. In this new age, China may take advantage of cheap labor and Taiwanese firms’ technology to establish industries and train employees with the sole goal of developing the economy. However, the overproduction of products may turn around to hurt the economy instead.
In this perspective, China’s real economic growth started with opening up markets to a level that politics permitted following its total grasp of Japan’s three and a half decades development from a conflict-loser to an economic giant (Zheng & Hu, 2006). Whereas, Japan was a nation that made efforts to grow from poverty to development, China was an agrarian economy that should take cautiously before attempting to emulate Japan holistically.
On the other hand, China could learn from strategies that worked for Japan. In any given stock market, the investor’s goal is being propelled back to the commencement of the biggest bull markets. For instance, envisage being in the United States two decades ago with full understanding regarding the way technological bubble could span out or 100 years back with a similar understanding of such a bubble. On Japan, there was a pre-bubble market, which is important to understand in this respect. This is followed by the nation remarkable economic development in the 1950s and 60s that was as a result of a strong exporting mechanism that contributed to a growth of more than 9% p.a during that period.
The Fate of the Economic Bubble
In addition, Japan was in a position to reach a pre-war gross domestic gross product (GDP) rate in 1955, and it had a spectacular short period when the number of the Bank of Japan increased to more than 15% p.a (Breton, 2015). Obviously, this was worrying- during the onset of the 1960s there were inadequate investment infrastructures (currently, it appears strange but previous Japanese spend less on transport facilities among others), overcapacity in iron and steel sector; and taking chances that the nation could be forced into liberalizing business activities (Zheng & Hu, 2006). However, the economy continued to soar; GDP increased by roughly 8% annually for the better part while the world was a little worried.
However, the main issue is for the goal of being wealthy there was no point going to Japan in the 50s and 60s. This is because; to a certain degree the stock market overlooked economic growth. Economic growth declined to about 4.2% in the 70s to 80s. On the other hand, the stock market increased suddenly. It increased four times in the beginning then the decades and ten times subsequently. Japanese stock market was out of control following its overreaction to American suspension of the gold guideline by “insistently printing money” to lower the yen while pumping credit into financial institutions. Any particular stock market where million business accounts are opened on a regular basis and has reached 100% within a year deserves being viewed with suspicion. In that view, all these bring into perspective China, a nation where economic development is collapsing; stock market as increased two times within a year with the decline.
In addition, a country where foreigners significantly underestimate the stock market regardless of its position in the global economy; liberalization initiatives are in progress and where the population prints money. While it can be that China is different from Japan, it’s in debt as well as an appalling corporate structure. The scenarios in both nations recognized, however, Japan’s stock market was rather terrible in the 70s and shareholders were poorly treated, as such there was nothing good about such market. Japan was able to attain a booming bull market that resulted into one of the well-known and largest bubble with no approval of shareholder value. China may follow suit. Nevertheless, this does not suggest that one goes overboard and invests in China’s stocks. Although, if China follows Japan’s trend, then investors have to deal with volatility, then there about 800% to go (Chenggang, 2015).
Stock market volatility in Japan acted as a platform for a breakthrough, though features that can be expected in a nation which is at a point of economic crisis. This does not imply trite, but in a global context; Japan is not the next Greece; rather it’s the third biggest economy worldwide. Moreover, its largest financial institutions are at the same level as the United States. It is also a worldwide power in business as well as business finance. While Japanese yen has a reserve status, it has two out of six biggest corporations worldwide and about 71 biggest 500, outshined by only United States and ahead of China, with about 46. Furthermore, even combining largest corporation in the Asian region with China’s, the total cannot outshine Japan’s. If Japan takes a risky economic approach, it provides a significant effect on other nations globally, because the worldwide growth relies on Asia.
Japan has already presented an approach that historians will write as the momentous international currency conflict since 1930. Japan believes that it is a leader in all areas. There is a likelihood of enormous economic challenges as the country attempts to address their issues, and unfortunately, the challenges will not be restricted to Japan. These will be the actual assessment of neo-Keynesianism theories. Japan will continue printing, monetize and expanding significantly.
Japan and China Economic Situation Evaluated
Following the collapse of the largest economic bubble in 1989, Japan continues to be mired in a two and a half non-recovery. In 2011, the nominal GDP was similar to 20 years before. Approaches to assessing nominal GDP demonstrates limited growth, however when compared China, its growth has been paltry. You can find other ways to measure nominal GDP that indicate limited growth; but compared to the US and China, nominal growth in Japan has been insignificant. Such lack of increase takes an extraordinary significance since when determining a nation’s debt to GDP, nominal GDP is regarded as the denominator. In cases where GDP is increasing while the economy is constant, the debt to GDP can increase at a remarkable rate.
In the recent past, Japan’s immeasurable and increasing debt was unsustainable, and low confidence in its finance adversely affected the economy. Major problems increased following Abe’s government efforts to drag the country from several years’ deflation using aggressive economic as well as financial stimulus (Valentine, 2014). Furthermore, the government unveiled USD 109 billion to spend and to depend on the Bank of Japan to acquire its asset, a technique considered as spend and print (Du, Fang & Jin, 2014). Much as the government’s bond has been stable, the debt to GDP increased to about 245% something that is not only considerably high but also strange (Du, Fang & Jin, 2014). There are about two years of growing an economy. On one hand, a country can increase its working people or enhance productivity on the other hand. Japan lacks the option of growing its working people, and it’s essentially intricate to an industrial market to increase productivity. If the population is in reality reducing while productivity increase is below 1%, the actual GDP increase is impossible (Hsieh & Klenow, 2009).
Besides facing enormous trade surplus for several decades, it’s currently witnessing massive trade deficits. If a country runs into at trade and economic deficits, requires private investment to fill the difference or central bank to print more money. In essence, this is an accounting identity, there are other options. Deficit massive monetization means using all the available savings. However, Japan should grow so as to address its monetary and financial mess. Implicitly, there is a desperate need for additional exports, because its elderly population cannot provide substantial increase in consumer expenditure. If anything, Japanese aging population are hoarders as well as savers (Dobrzański, 2014). The Abe administration and Bank of Japan purposed to ensure that inflation was at about 2%. With a nominal GDP increase at 3.6%, Japan was still in deflation. The country has been attempting to generate inflation for about two years. To get an inflation of 2%, it’s necessary to increase the price of its imports. However, the challenge is that Japan imports approximately 16 percent of its GDP, which implies that to achieve an inflation of 2% then its currency should reduce by roughly 15 to 20 percent on a yearly basis. The yen has significantly reduced in the recent past.
Even though, this has to be done yearly, on business-weighted basis will all its business partners. On the other hand, as China growth declines after years of significant historical rates, the slowdown as well as stock market slump is leading to more uncertainty regarding the worldwide financial backdrop.
China’s Plummeting Economy
According to the Asian Development Bank, China growth has been growing at 7% in the last 25 years. However, pundits are concerned about the real GDP, which is likely to be lower compared to official reports. On the other hand, other analysts project the real GDP to be more at about 4-5%. Observers are also taking into account the country’s reducing use of copper, oil and other products and the declining demand for electricity- as a further depiction of a falling economy. China is largely significant to the well-being of the worldwide economy, for example, it contributed almost 40% to the global economic development (Du, Fang & Jin, 2014). However, the decline in the Chinese product demand is influencing a broad spectrum of firms as well as countries that supply China with raw materials. According to a previous study demonstrates that the present worldwide growth in GDP of 3.3% can decline to about 0.5% China’s demand decreased considerably (Chenggang, 2015). The economic crisis in China is partly a result of its attempt to change from several years of growth reliant on exports, manufacturing and savings to the economy driven by rapidly increasing middle-class consumers.
Also, this change is directly impacting the economy of United States. Although, heightened concerns regarding China’s economic growth with other emerging markets have contributed to notable volatility in stock markets. The decreasing of materials could be adverse to the economic outlook of US. In spite of the increasing middle-class population, China’s growth has been weak particularly household that industrial. Without doubt, Chinese GDP share attributed to private use has been reducing for many years while 35 percent of GPD is low compared to other nations with related income levels. Additionally, its private use lags behind other fast developing markets like Japan. Scores of scholars allege that the administration must provide minimum growth of 7 to 8 percent to avoid adverse challenges to CPP political interests’ (Zheng & Hu, 2006). The failure to maintain this minimum growth proves to be risky in industry closing, joblessness, public demonstrations, which many experts believe that the CPP considers the risk to its influence as well as control. Regardless of the investment boom a few years ago, China’s economic development began to fall steadily, to the degree of less than 7-8 percent steady revenue.
According to Zheng, Hu, & Bigsten, (2009) China is a country that has witnessed necessary monetary resources (energy, food, and raw material) while declining supply of public facilities (education, health care, and housing). Ironically, such inadequacies have been minimized as growth occurred; continuous growth strangely is likely to enhance the demand for resources, assuring their long-term shortage in future. China’s large financial institutions have been recapitalized by capital infusion by the administration before going public. Financial institutions led to corporations, municipalities, enterprises among others. The administration issues reserved debt while non-government borrowings, depict debts of other establishments, municipalities and households, has increased remarkably. China’s total debt was approximately USD 28 trillion, nearly three-fold its yearly economic productivity. Of these funds, nevertheless, the non-governmental debt was roughly 227 percent of the GDP; from 116 percent eight years ago (Guo & Jia, 2005). Like Japanese growth period, substantial leverage was used in the economy via the financial institutions. Leverage, though, is associated with the risk that designated by the institution’s management and endorsed by regulators.
In spite of the significant growth in the institutions loans during a declining growth, Chinese financial institutions have reported reduced non-performing loans instead of increasing, as a percentage of the overall asset. Like contemporary China, the Japanese economy was previously seen to be an economic citadel that would only challenge the United States. Its rapid economic rebound and development following the destruction suffered in WWII was dubbed as the Japanese Miracle. Japan’s economic vibrancy implied the nation’s Corporation had the ability to procure some notable American assets such as the Rockefeller Center and the Pebble Beach golf course. Such dealings brought about animosity against Japanese investors. Before long, an overflow of equity and the simmering real estate alongside the economic slump and price deflation ushered in an era of Japan’s Lost Decade. Japan’s historical financial uncertainties paint an exact picture of where China’s economy could be heading. However, the Japanese story may not necessary spell doom the China’s.
Socio-economic Variables between the two countries
Regarding surface area, Japan is tiny in comparison to China, with one of the highest living standards than China. While Japan’s internal markets are more flooded, China has unsaturated markets (Du, Fang & Jin, 2014). The living standards in China come with more opportunities regarding improvement, which implies more prospects for national fabrication and sell of household gadgets. An aging Japanese populace is another limiting factor that limits the country’s capacity to gyrate the economy. Moreover, China and Japan have rather dissimilar economic post-war histories. While Japan was an industrialized economy that soared after the Second World War, China was then an agrarian economy. At the present, China is experiencing internal migration where millions of people move into the city for employment.
Conclusion
In reality, China is really faced with a completely different issue. To use Japan as a case study is to look in the wrong direction, except the fact that a nation can only grow is fast as the rate with which its population and technology grow (Dobrzański, 2014). Nonetheless, irrespective of all the market frills, capitalist economy, and China’s central government and autocratic at its best has entered the unfamiliar territory, in a bid to ensure it puts the economy under control. With strong facets of a command-and-manage economy, China can turn around pieces as opposed to Japan. In the end, China can overcome the challenges that led to the fall of Japan now that they manufacture substandard and less durable products. In a nutshell, it translates into a never ending demand for products that seem to wear out so fast.
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U.S. free trade diplomacy with Australia and Singapore
U.S. free trade diplomacy with Australia and Singapore
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American Politics & Foreign Policy
COMPARATIVE CASE STUDY ASSIGNMENT
This assignment asks you to employ a basic method of analysis common to the study of politics: the comparative case study. The comparative case study allows an analyst to compare two or more cases using standard questions and criteria. The paper will therefore require you to present an argument sustained across two different cases.
This basic analytical approach is a common and useful tool in many professional and academic research contexts, such as business, law, NGO work, government, and across the social sciences. It can be a valuable tool in your academic and professional career.
Topic: Explain U.S. foreign policy in two “cases.”
Task: Sustain an argument (thesis statement) using two cases of U.S. foreign policy decisions or behavior. You must develop a causal explanation based on what you are learning in the unit, and your own thoughts and insights. Some suggested approaches are:
Presidents are meaningfully constrained by public opinion in foreign policy decisions due to…..?In reality, Congress has been unable to check or balance Presidential foreign policy decisions since
1965 because….?Special interests such as economic actors or ethnic influence groups can dominate U.S. foreign
policy on issues important when….
Some possible pairs of cases are: U.S. relations with Indonesia under Suharto and under Yudhoyono; U.S. use of force in the Bosnian and Kosovo conflicts; U.S. relations with Canada and Australia; U.S. free trade diplomacy with Australia and Singapore; U.S. policy towards Africa under G.W. Bush and Obama…
Description: The essay should utilise following general format (or something similar):
. i) introduction and thesis statement ?
. ii) introduction of the cases chosen and rationale for their selection/utility ?
. iii) detailed examination of the cases based around the thesis statement; ?
. iv) discussion and synthesis of the results of the analysis for both cases; ?
. v) conclusion. ?
It is advisable to choose cases (that is, specific decisions or events in U.S. foreign relations) which and have clear relevance to the concept you choose. It is not necessary to include all aspects or details of a given case in your paper. Rather, you should focus on providing a “structured, focused comparison”1 of the two cases to examine one clear-cut proposition/argument. This means asking the same question (argument), using basically the same analytical approach (same kinds of evidence), across both cases.
1 Alexander L. George and Andrew Bennett. 2005. Case Studies and Theory Development in the Social Sciences. Cambridge, Mass.: The MIT Press.
You should limit your cases to a reasonable time period to make the analysis manageable. Narrow and precise cases are usually best.
Conclusion. You must state your conclusion clearly and concisely at the end of the paper, introducing no new information.
Formatting: 1.5 spacing, 11 or 12 point font. ?Word count: 2,500 words (excluding reference list). Papers outside the grace period of 10% over
or under this word count will attract a penalty of 5% per 100 words.
Writing and Referencing: Grammar, spelling, and correct citation format are all important aspects of writing a good paper and will be considered in the final grade. You may use in-text (such as Harvard) or footnote referencing style, but whichever one you choose must be used correctly and consistently.
Your essay will be assessed on its focus around a defensible thesis argument, appropriate scope, justification of cases, analytical rigour, clarity of expression, ability to keep to the word limit, evidence of research skills, evidence of reading, critical analysis, and correct citation of all sources and quotations.
It is actually due in 4 days time so if it were completed any sooner that would be greatly appreciated ! Cheers.
SAMPLE ANSWER
Comparative Case Study: U.S. free trade diplomacy with Australia and Singapore
An essential function of the American government is basically to carry out relations with over 180 other countries globally. Foreign policy determines the way the United States will conduct relations with other nations. U.S foreign policy is how the country interacts with other countries and creates standards of interaction for its corporations, organizations, as well as individual citizens. It is aimed at furthering particular goals (Pickering, 2011). In this comparative case study, standard questions and criteria are used in comparing two cases. An argument is presented with the use of 2 cases of U.S. foreign policy behaviour. In particular, the cases which are compared in this comparative case study are United States free trade diplomacy with Singapore and Australia. Thesis statement: the specifics of the United States free trade agreement with Australia is more or less the same as that of the agreement between the United States and Singapore since the United States in both Agreements seeks to further certain goals. America seeks to ensure greater access of American products into the Australian and Singaporean/Southeast Asian markets and allow American products to be more price-competitive within these markets when competing with local suppliers or suppliers from other countries.
U.S free trade diplomacy with Singapore and Australia
These cases were chosen since they are aimed at increasing trade between America and Singapore and between America and Australia. In essence, increased trade results in the creation of more jobs in America and it provides more opportunities for American companies. The United States shares a lot of strategic and fiscal interests with both Australia and Singapore. Just like with Australia, the United States has a longstanding relationship as well as essential investment and trade relationship with Singapore (Evans & Welch, 2015). The United States recognizes that competitive and open markets are important drivers of wealth creation, innovation and economic efficiency. America also recognizes the significance of liberalization of trade in services and goods at the multilateral level and understands the increasing significance of investment and trade for the economies of Australia, Singapore and other countries in the Asia-Pacific region (Maynes, 2010). As such, these cases were selected also because examining and analyzing them will help to shed more light on how America’s Free Trade Agreement with Australia contrasts or differs with the FTA agreement it has with Singapore. Moreover, examining these cases would provide important insight and expand knowledge on how the United States benefits from these agreements and how it advances America’s foreign policy.
Examination of the cases
S free trade diplomacy with Australia
America has implemented fourteen free trade agreements with twenty nations around the globe. Free trade agreement (FTA) negotiations between Australia and the United States were finalized in the year 2004. Given that the FTA went into force in 2005 January, the FTA between Australia and America has resulted in a 104 percent rise in the United States trade surplus with Australia (Naoi & Urata, 2013). The FTA between America and Australia not only ensures greater access of Australian products into the American market, but it also improves the prospects for Australian investment and trade, as well as services. It also enhances the investment and regulatory environment between America and Australia, and fosters increased business mobility (Desker, 2010).
It is worth mentioning that America imported goods worth $9 billion from Australia and exported products worth $26 billion in the year 2013 (U.S. Department of State, 2015). Under the US-Australia FTA, the majority of Australian products get into America duty free and also free of merchandise processing fee, and almost all Australian goods would be exported to America free by the time the FTA is totally implemented by 1st January, 2022 (U.S. Customs and Border Protection, 2015).
Through the elimination of duty, the Australia-U.S Free Trade Agreement allows apparel and textile exporters from the United States to be more price-competitive within the Australian market when they compete with local suppliers as well as with suppliers from third world countries who have no duty benefits. By eliminating various non-tariff barriers, the Free Trade Agreement further opens the Australian market to goods from the United States (Aggarwal, 2013). It is notable that the Free Trade Agreement presents considerable benefits in an extensive variety of service sectors. It also serves to facilitate American investments through a stable business environment and predictable access. American companies, for the very first time in a number of sectors, would be permitted to compete for Australian government’s purchases on a fair, unbiased basis (Evans & Welch, 2015). American vendors can bid on contracts to supply to the territory, state and commonwealth government entities. The Commonwealth Government of Australia would get rid of its industry development programs, which stipulated that suppliers satisfy various prerequisites as conditions of their contracts (Aggarwal, 2013).
Under this Free Trade Agreement, duties on qualifying American apparel and textile goods that are exported to Australia have been removed or would be removed through gradual decreases over a set time period, on or before 1st January 2015. Every qualifying travel product is duty-free and all qualifying Australian footwear are free of duty with the exception of seventeen particular fabric/rubber and protective/plastic footwear items (Naoi & Urata, 2013). The Free Trade Agreement between America and Australia is a mutual tariff elimination accord. This means that qualifying travel goods, footwear, apparel and textile products imported into America from Australia are subject to similar duty rates as those for qualifying American exports to Australia. In order to make the most of the elimination or reduction of duty, goods have to qualify as originating products under the Agreement terms. Generally, the goods should have adequate Australian or American processing or content in order to meet the criteria (Aggarwal, 2013). Rules of Origin for Apparel and Textile Goods: the products should contain only Australian or American inputs. Even so, products that contain inputs from other nations may also qualify if they satisfy certain conditions specified in the FTA rules of origin. The rules for apparel and textile goods are commonly termed as yarn forward, which demands that the production of the yarn and every other operation forward take place either in America or Australia, although the fibre might come from another country. There are also Rules of Origin of Footwear and Non-textile travel products. For qualifying products where the Free Trade Agreement tariff benefits are requested, the importing company has to make a claim of reference. The importer has to state in writing that the product being imported actually qualifies as originating (Harris & Robertson, 2011).
The FTA between Australia and America has measures for ensuring that the originating products are not subject to fraud, for instance transhipment. Claims for preferential treatment under the Agreement are considered a declaration whose honesty and truth might be audited or confirmed by American and Australian custom officials. In case a preference has been claimed and the customs officials find out that the products do not qualify, the duty benefit would be lost and fine may be imposed (Harris & Robertson, 2011).
S free trade diplomacy with Singapore
The FTA between Singapore and America was signed in May 2003 in Washington, DC. It entered into force in the year 2004. Since then, the United States trade surplus with Singapore has increased by over 800% to $12.7 billion. The export of American goods to Singapore was worth $30.6 billion whereas imports from Singapore were worth $17.8 billion in 2013 (U.S. Department of State, 2015). The FTA between Singapore and America has allowed exporters from both countries to benefit from tariff concessions. It has also helped both countries to attract investors and increase in competitiveness. It is worth mentioning that this FTA describes the obligations and duties of the Unites States and Singapore regarding a number of areas including customs procedures, services and goods, the environment, movement of people, as well as protection of intellectual property. Furthermore, it outlines the guidelines that can be used to settle disputes (Parinduri & Thangavelu, 2013).
The main aim of the United States-Singapore FTA is essentially to facilitate trade between these 2 nations through the elimination or reduction of tariffs. Exporters from either party could benefit from cost-savings in the following sectors: textiles, processed foods, information technology and electronics, chemicals and petrochemicals as well as precision instruments (Singapore Government, 2015). The Agreement also allows Singaporean suppliers to take part in many tenders of services and goods conducted by the government of the United States. Likewise, American suppliers can participate in tenders conducted by the government of Singapore. Singaporean suppliers are allowed to take part in procurement activities of nearly 100 federal entities in 37 states across America.
In the FTA, both the United States and Singapore also reached an agreement that each of them would take steps to execute Phases 1 and 2 of the APEC Mutual Recognition Arrangement (MRA) for Conformity Assessment of Telecommunications Equipment as regards the other country. In the Asian region, Singapore was the first nation to operate an MRA on telecommunication equipment certification with America (Singapore Government, 2015). It is worth mentioning that the Mutual Recognition Arrangement facilitates direct entry of telecommunication equipment into the market of either party without requiring extra testing and certification. Examples of these telecommunications equipment include Asymmetric Digital Subscriber modems, Wireless Broadband Access equipment, radio pagers and telephones (Singapore Government, 2015).
This FTA offers 100 percent coverage of Singaporean domestic exports to America and the elimination of tariffs. Under this Agreement, the United States and Singapore would each gradually remove its custom duties on the other party’s originating goods according to Annexes 2C (Singapore Schedule) and 2B (US Schedule). Originating goods refers to goods which are entirely produced or obtained within the territory of Singapore and/or the United States and have met the prerequisites stipulated in Annex 3A (Wolff, 2015). Annex 3C of the FTA provides a listing of products which are considered as re-manufactured products that are also considered to have come from America or Singapore. In addition, the two countries would not maintain or implement a merchandise processing fee for originating products. The importing individual or organization has to make claim for preferential treatment. The information with regard to the qualification of the products as originating goods should be submitted to the importer by the exporter. The exporter in Singapore must verify that the products actually came from Singapore. Both countries would not introduce a new customs duty or increase an existing customs duty on imports of originating goods, other than as allowed by the FTA, subject to Annex 2A. The Agreement has also facilitated the elimination of non-tariff obstacles hence the cost of doing business would be kept low and exports would become more competitive (Parinduri & Thangavelu, 2013).
The Singapore-United States Free Trade Agreement has been helpful in increasing exports from the United States, improving the competitiveness of America globally, securing presence of the United States in the Southeast Asia region, and providing a standard of free trade which serves to encourage a high degree of liberalization. In Singapore, conducting a business has become more transparent, cheaper, faster and much easier. The Agreement has provided American exporters and companies with more access to Southeast Asia, one of the largest markets globally, where there are lots of opportunities (Wolff, 2015). Other than binding all Singapore tariffs for American products at zero, the U.S-Singapore Agreement has increased export opportunities for some manufacturing sectors in America, such as the ones that make medical equipment and instruments, chemicals, pharmaceuticals, photo equipment, microelectronics and certain textiles. In addition, with few exemptions, Singapore has accorded considerable access to its investment and services market. Singapore has also increased opportunities for government procurement as well as protection of intellectual property. What’s more, the Free Trade Agreement provides for revolutionary collaboration in fostering labour rights and the environment (Parinduri & Thangavelu, 2013). Singapore was America’s tenth biggest export market in 2010 at more than $28 billion. This represents an increase of 31 percent over the previous year 2009. The main exports from America to Singapore are in the following sectors: medical devices, oil and mineral fuel, machinery, spacecraft and airplane, and electrical machinery (Aggarwal, 2013).
Discussion and synthesis of results
The results show that in both the Free Trade Agreements between America and Australia and between America and Singapore, the United States seeks to further certain goals. For instance, the Agreement between the United States and the two countries would remove or gradually reduce tariff barriers on originating goods, and eliminate a merchandise processing fee for originating products. The Australia-U.S Free Trade Agreement furthers the U.S foreign policy goal of allowing American apparel and textile exporters – that is, textiles made in America – to be more price-competitive within the Australian market when they compete with the local Australian suppliers in addition to suppliers from other countries such as Thailand, India, China, or Malaysia who have no duty benefits. Besides eliminating tariff barriers particularly duties, the Free Trade Agreement between America and Australia also removes non-tariff barriers which helps to further open the Australian market to Made-in-the-United States products (U.S. Department of State, 2015). Furthermore, through this Agreement, America seeks to attain the goal of creating more employment opportunities in the United States and benefit American exporters especially companies in America which produce goods that qualify as originating goods.
Similarly, the Free Trade Agreement between the United States and Singapore is aimed at achieving the foreign policy goal of facilitating trade between America and Singapore. In addition, the United States uses this Singapore-U.S FTA to accomplish the foreign policy goal of increasing exports of good that originate from the United States. Furthermore, the United States achieves the foreign policy goal of improving the competitiveness of America internationally, securing America’s presence in Southeast Asia, and providing a standard of free trade which in fact promotes a high degree of liberalization. Equally important, the Agreement helps to achieve America’s foreign policy objective of providing exporters and companies based in the United States with more access to the market of Singapore and the rest of Southeast Asian region, which is regarded as one of the largest markets worldwide with plenty of business opportunities. Moreover, the Agreement between the United States and Australia and the one between the United States and Singapore advance the foreign policy goal of enabling American suppliers to participate in tenders conducted by the governments of Australia and Singapore.
Conclusion
To sum up, in the FTA between America and Australia and between America and Singapore, the United States seeks to achieve the foreign policy goal of facilitating trade between America and Australia and between America and the Southeast Asian nation of Singapore by removing or decreasing tariffs, and removing non-tariff barriers. American exporters can benefit from cost-savings when they export various originating goods to Australia and Singapore. American companies that produce the following types of products can particularly benefit: chemicals, precision instruments, information technology and electronics, medical equipment and instruments, pharmaceuticals, photo equipment, microelectronics and certain textiles. Through these Agreements, America is able to realize the foreign policy goal of improving the competitiveness of America worldwide. In addition, the United States, through these Agreements, seeks to accomplish the objective of creating more jobs in America and benefit American exporters that export originating goods to Singapore and Australia.
References
Aggarwal, V. K. (2013). U.S. Free Trade Agreements and Linkages. International Negotiation, 18(1), 89-110. doi:10.1163/15718069-12341246
Desker, B. (2010). In defence of FTAs: from purity to pragmatism in East Asia. Pacific Review, 17(1), 3-26.
Evans, K. J., & Welch, J. M. (2015). Official Eyes on History: Digital Access to Foreign Relations of the United States. History Teacher, 48(3), 505-515.
Harris, R. G., & Robertson, P. E. (2011). Dynamic Gains and Market Access Insurance: Another Look at the Australia–US Free Trade Agreement. Australian Economic Review, 42(4), 435-452. doi:10.1111/j.1467-8462.2009.00557.x
Maynes, C. W. (2010). Bottom-up foreign policy. Foreign Policy, (104), 35.
Naoi, M., & Urata, S. (2013). Free Trade Agreements and Domestic Politics: The Case of the Trans-Pacific Partnership Agreement. Asian Economic Policy Review, 8(2), 326-349. doi:10.1111/aepr.12035
Parinduri, R. A., & Thangavelu, S. M. (2013). Trade liberalization, free trade agreements, and the value of firms: Stock market evidence from Singapore. Journal Of International Trade & Economic Development, 22(6), 924-941. doi:10.1080/09638199.2011.616934
Pickering, T. R. (2011). Foreign Affairs Challenges, Priorities, and Policies. American Foreign Policy Interests, 30(5), 266-274. doi:10.1080/10803920802435252
Global Economic Environment and Marketing
A. Project question
A major multinational corporation has appointed you as an economic advisor. You are requested to compile a report regarding the macroeconomic environment in two countries where the firm operates and explain how it might affect the company’s economic activity.
B. Project specifications
1. You may choose to focus your analysis on any existing multinational firm.
2. The two countries must be chosen from section C below as follows: one country from List 1 and one country from List 2.
3. Your report must include:
a. A brief description of the company.
b. A comparative analysis of all major macroeconomic indicators (see section D below, excluding 5 and 7) for the two countries and their overall impact on firm’s economic activity.
c. An analysis of the market structure in which your company operates for the two countries.
d. An analysis of the monetary and fiscal policy for the two countries andtheir impact on the firm’s economic activity.
e. An analysis of the foreign trade policy (international trade agreements)for the two countries and its impact on firm’s economic activity.
1
C. Country Lists
List 1 List 2
Australia Brazil
Austria China
Canada India
Italy Mexico
Sweden Russia
D. Macroeconomic indicators1 to be analysed (the last available 10 years):
1. GDP growth rate
2. GDP per capita at constant prices
3. Inflation rate
4. Unemployment rate
5. Interest rates (Monetary Policy Rate)2
6. General government balances (% of GDP)
7. Balance of Payments (% of GDP)
8. Exchange rates (national currency/USD OR National Currency/Euro)3
1 We recommend that you use the IMF database to collect your data for most of these macroeconomic indicators.
2 Data available from the relevant Central Banks websites
3 ibid
2
E. Project 1 Submission Guidelines
Length 2,500 words, +/- 10% (excluding tables, graphs, footnotes and references)
Presentation Arial 12 fonts, 1 ½ spacing, justified text
References A minimum of 20 references using Harvard Referencing
System (textbooks, official data and information sources)
F. Marking criteria and weights
CRITERIA WEIGHTS
Brief description of the company and analysis of the market structure in which the company operates for the two countries
20%
Data collection, comparative analysis of major macroeconomic indicators and impact on firm’s economic activity
25%
Analysis of the monetary, fiscal and foreign trade policy for the two countries and their impact on firm’s economic activity
40%
Report structure, presentation and references 15%
SAMPLE ANSWER
With the increasing globalization, it is important for a business organization to understand all the macroeconomic factors that may affect their business operations in different nations. Understanding the macroeconomic environment of the nation in which a business operates is important for the organization to develop marketing and business strategies that will work successfully. Marketing strategy should either be standardized or localized to suit the specific market in which a business operates. There are different factors that may affect how a business operates such as interest rates, inflation rates, GDP and the level of unemployment. This paper will provide a detailed analysis of the macroeconomic environment of Canada and India and how these factors might affect Wal-Mart economic activities in these two nations.
Wal-Mart Company Overview
Wal-Mart Company is an American Multinational retail store founded in the year 1962 by Sam Walton. The company runs a chain of warehouse stores and discount department stores in different countries. The company headquarters is in Bentonville, United States. Walmart was incorporated in the year 1969 and began selling its shares to the public in 1972. The company operates in three trade sections Wal-Mart US, Sam’s Club, and Wal-Mart Superstores. The company has over 11,000 outlets in 28 different nations.
The Fortune Global 500 rated Wal-Mart stores to be the world largest company in terms of revenue and similarly it is rated the biggest private employer in the globe having about 2.2 million workers. Wal-Mart marketing strategy is selling quality products at low prices to improve the lives of their clients and both the clients and the community to save money and live a better live.
Wal-Mart Stores Inc. supply diverse assortment of products, services and brands in the market. Some of the products the company offers include beverages, dry and wet grocery, food, clothes, electronic accessories, furniture, clothes among others. The corporation offers a great selection of high-quality merchandise, welcoming services under their “Everyday Low prices” strategy. The industry in which Wal-Mart Stores operate is the retailing industry. In the retailing industry, companies offer merchandise and products for sale at a fixed location such as a store, online, or by mail.
Comparative analysis of major macroeconomic indicators in Canada and India
Canada is positioned as the 11nth major in the globe in terms of Nominal GDP and the 14nth largest when it comes to Purchasing Power Parity economy in the globe. Canada is part of Group of Seven (G7) as well as the Organization for Economic Co-operation and Development (OECD) and is among the globe wealthiest countries (Nicoletta et al., 2010). The Canada is a developed economy chiefly controlled by the service, logging and oil industry. The company also tops in the seafood and fishing industry as well as entertainment and software industry.
On the other hand, India is positioned as the seventh in when using Nominal GDP and 14nth in relation to Purchasing Power Parity (PPP) (Ahluwalia, 2012). India is among the newly industrialized countries. It is a member of BRICS having an average growth rate of 7% for the last twenty years. India economy is rated among the fastest growing major economies in the world after China economy. India boasts of a young population, healthy savings and investment rates, low dependency ratio and high globalization rate. The primary source of revenue in India is the service sector. In fact, India is the major exporter of BPO services, software services, and other IT services followed by agricultural and industry sector.
GDP Growth Rate: This economic metric measure the rate at which the nation’s Gross Domestic Product over a period of one year. In Canada, the GDP annual Growth rate has increased by 1% in the second quarter of 2015 as compared to the previous year (IMF, 2015). Ranging from 1962 to 2015, the GDP annual growth rate in Canada averaged 3.24%. The GDP highest value was 8.80% attained in 1962 and a record of -3.98% in the year 1982. Statistics indicates that the wholesale trade dropped by 0.4% and the retail sector increased by 0.7%. This poses a mixed impact for Wal-Mart as it engages in both wholesale and retail trade. Therefore, Wal-Mart should concentrate more on the retail sector in Canada. The average GDP from 1998 to 2015 is 1.6% with an unsurpassed high of 5.30% in 2009 and a record low of -1.70% in at the beginning of 2009.
In India, the GDP annual growth rate has also increased but at a rate of 2.06 in the second quarter of 2015 as compared to the previous year. The retail industry has been enjoying a high growth rate in India paltry because of the high population consisting of young people and working population (Mohan & Chitradevi, 2014). Therefore, India is a favorable market for Wal-Mart as most of its operations are in the retail sector of the economy.
GDP per capita at constant prices: This metric refers to the measure of the total output of a nation computed by dividing the Gross Domestic Product (GDP) with the sum of all the people in the country. This metric is paramount for indicating the relative performance of different countries. It is imperative to note that an increase in per capita GDP indicates positive economic growth.
According to International Monetary Fund, the value of GDP per capita at constant prices was 38184.62 Canadian Dollar in the year 2009(IMF, 2015). Canada GDP per capita income has been on the rise since 2009. Projections indicate that the GDP per capita income is expected to be 41765.85 by the end of 2015 which is an improvement by about 6,000 Canadian Dollar. This positive outlook indicates an increase in economic growth in real terms and, therefore, may present more opportunities for Wal-Mart because the people purchasing power has increased.
On the other hand, International Monetary Fund reported the GDP per capita at constant prices in India to be at 31464.97 Indian Rupee in the year 2009. International Monetary Fund project that this value will increase to 46723.21 by the end of 2015. This indicates that Indian economy is growing at a faster rate as compared to Canada. Therefore, Wal-Mart should concentrate on increasing its operation activities in India as compared to Canada.
Inflation Rate: inflation refers to the continued and persistent increase in the common level of prices of commodities and services in an economy. Inflation is felt greatly in the retail industry because an increase in inflation results in the decrease in purchasing power of the currency circulating in the economy. The inflation rate in Canada has been increasing gradually over the years. The consumer prices in Canada increase by 1.3% in the year that ended in August 2015. The inflation rate in Canada values at 3.19% in the period between 1915 and 2015. The highest inflation rate ever felt in 1920 which hit an unsurpassedhigh of 21.60% in 1920 and a record low of -17.80% in the year 1921 (Beers & Nadeau, 2014). This macroeconomic metric indicates that the cost of goods in Canada has been increasing over the years, and thus it is not favorable for Wal-Mart Supermarket. This trend is because of an increase in inflation rate results in the decrease in purchasing power of consumers.
The inflation rate increased by 3.66 percent year-on-year as at August 2015, a slight decrease from 3.69% increase in July this concurred with the market expectations. In fact, the inflation rate hit a record low this year in August; the current inflation rate is below the set target of the central bank that is 6%. This is a good indicator of a thriving economy and good news for the retail sector because decreasing inflation rate results in an increase in the purchasing power of the consumers.
From the above comparison, it is evident that India is favorable as compared to Canada in terms of the inflation rate. The inflation rate in Canada is on the rise while the inflation rate in India has been dropping significantly. Therefore, Wal-Mart should expand its operation in India to take advantage of the decreasing inflation rate and increasing the purchasing power of consumers living in India.
Unemployment rate: Unemployment rate also has an impact on the economy performance especially on the retail sector. Unemployment rate determines the consumption level in a country and marketers should understand the trends in their market before making an investment decision. The rate of unemployment in Canada increased from 6.80% to 7% between August and July 2015. The unemployment rate had an average of 7.73% over the last ten years with an unsurpassed value of 13.10% in December 1982 and a record low value of 2.90% in June 1966. This indicates that the changes in the level of unemployment is fairly balanced and does not fluctuate.
Consequently, the rate of unemployment in India has been declining over the last five years. The unemployment rate in India declined from 5.20% in 2012 to 4.90% in 2013 (Mohan & Chitradevi, 2014). The unemployment rate in India averaged 7.32 percent in the last 30 years with an unsurpassed value of 9.40% in 2009 and a record low of 4.90% in the year 2013. This trend indicates that the Indian economy can create employment opportunities annually to absorb the vibrant new workforce to the economy. Therefore, the purchasing power of individuals in India is high. As such, Wal-Mart should utilize these investment opportunities and invest in the Indian market as compared to the Canadian market.
Interest Rates: Interest rates refer to the cost of using an asset. That is the sum charged by a lender to a borrower for the exploitation of an asset. An interest rate is often expressed as a percentage of the principal value (Mohan & Chitradevi, 2014). Interest rates have different effects that ultimately reflect in consumption and investment in an economy. High-interest rates increase the cost of borrowing and thus may limit the expansion of Wal-Mart through the use of credit facilities. On the same note, the interest rate has an impact on consumption, an increase in interest rates result in a fall in consumption. Therefore, it may affect the volume sold by Wal-Mart in the Respective economies.
In Canada, the general interest rate is at 0.5% as at September 2015. This value is lower than the average interest rate of Canada which is 5.98%. This indicates that the cost of borrowing is low, and Wal-Mart can utilize the resource to expand their operations in the Canadian market. The consumption level is also high, and this may result in increasing demand for Wal-Mart goods and services in Canada.
On the other hand, the interest rate in India has been decreasing over the years the current interest rate is 6.75% as at September 2015.This value is slightly higher than the value of the average interest rate that is 6.71 in the period between 200 and 2009. The slight increase may be felt in the decrease in consumption level as the cost of borrowing has slightly increased and may result in fall in the general consumption in the Indian economy.
In terms of the General Government Structural Balance, the potential GDP in Canada was reported to be -2.04% of the potential GDP in the year 2009 (Beers & Nadeau, 2014). The International Monetary Fund projects that the General Government Structural Balance of the potential GDP to be 0.05%. The value of the general government structural balance comprises of asset prices movements, temporary financial sector, and expenditure items. The metric evaluates the government cyclically adjusted balance from nonstructural elements beyond the economic scope. On the other hand, the Indian government experienced a budget deficit of 4.50% of the GDP indicating that the government has to allocate more money for financing government activities in the country (Mohan & Chitradevi, 2014).
The Balance of Payments: refers to a financial metric that is sued to summarize a nation’s transaction with other nations. The balance of payment looks into the transactions between a nation’s residents and non-residents in terms of transfer of goods, services, income and financial claims. In Canada, the have a current account of -17398 CAD Million in the second quarter of 2015. This indicates that Canada is experiencing a current account deficit. However, the average value of the current account was valued at -1808.71 indicating that the nation current account has been improving. Canada international policies encourage foreign trade and foreign direct investment of multinationals in their region. These policies may prove beneficial, and Wal-Mart should seize the opportunity to invest in Canada.
Exchange rates also have effects on firms that export goods and import raw materials. A devaluation of currency is beneficial to multinational firms as it will reduce the exporting rates while an appreciation in exchange rates increases the cost of export. The Canadian Dollar has been trading at 1.30654 against the US Dollar. This indicates a moderate gain against the euro as the industrial production gained as a result of QE program. On the other hand, the Indian Rupee trades at 65.049 against the US Dollar indicating that the value of Canadian Dollar is higher compared to the Indian Rupee.
Recommendations and Conclusion
From the extensive research on the macroeconomic indicators in Canada and India, it is worth noting that investing in India is more profitable as compared to Canada. This notion is because India is categorized as one of the newly industrialized countries and one of the world’s fastest economies (Mohan & Chitradevi, 2014). Macroeconomic metrics indicates a moderate long-term economic growth prospective because of the Indian young population, low dependency ratio, decreasing interest rates and a positive GDP growth rate as compared to Canada.
The unemployment rate has been declining in India indicating an increase in Per Capita income. This trend is good as it will result in a rise in the general level of consumption as people purchasing power will increase. This is contrary to the Canadian unemployment rate that increasing over the years. The population is also low and thus the market share in the retail industry is lower as compared to India.
Therefore, Wal-Mart should focus on increasing its business operations to take advantage of the positive economic outlook for the Indian economy. The company has a potential of increasing its market share because of the high population in India. This population will provide market for the Wal-Mart goods and services and on the same note provide cheap labor and hence cut down cost of production.
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Mohan, C., & Chitradevi, N. (2014). IMPACT OF MACRO ECONOMIC FACTORS ON BANKING INDEX (CNX BANK) IN INDIA. International Journal of Trade & Global Business Perspectives, 3(1), 722.
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