Naked Economics Essay Example | Topics and Well Written Essays - 750 words

Naked Economics - Essay Example Wheelen has stressd the importance of innovation in his opening chapter. He says that trade is like innovation. Imagining larger goals such as turning corn into stereo, soybeans into cars and Windows software into French wine, he says that such a large context innovation is happening in trade in both rich and poor countries. According to him trade makes people richer and brings in more specialization in production. Wheelen's argument is that trade is mutually beneficial as it is based on the concept of voluntary exchange. In today's global trade order innovation has a greater role and helps in the value addition of global trade. The growing competitive environment and emergence of new industry houses from developing markets are compelling industrial houses world over and ambitious nations to give shape a solid action plan for the long term existence. With the opening up of economies, the capital flow has now become freer and margins have come down significantly. Most of these compani es are now working on shoe string margins or carrying out specific cost saving measures to increase their competitive advantages. Companies from developing nations are also aggressively entering into the markets in developed world such as United States, European Union and United Kingdom. While industry has to decrease the cost of production, it was necessary to improve technology and product quality to sustain in this highly competitive global trade scenario. It is in this scenario that multi national companies are thinking of a new approach for growth. Innovation is considered as the major factor deciding the competitive power of industries and nations. Wheelen says that trade makes the world richer by allowing greater specialization in production. According to Wheelen the trade will also help the customers products and services are lower cost. Not yet finished extolling the virtues of international trade, Wheelen turns to saying the myths of "sweatshop labor" and a trade-fostered environmental "race to the bottom." In the chapter "The Power of Markets", he portraits the power of markets to improve the consumer's life. He describe in the work about how markets use "prices to allocate scarce resources," how "markets are self-correcting," and how "every market transaction makes all parties better off." Trade is an unavoidable necessity in today's economics. Wheelen is successful in evaluating the strength of market and trade in improving living standards. He portraits how politics is influenced by trade related issues. Providing a in-depth analysis of public choice field of economics, he says that even smaller groups can make political impacts in the economic interest. In the chapter "The Power of Organized Interests," he says that farmers and ethanol producers were able to wrangle beneficial legislation with their collective bargaining power. It also gives an idea of rent seeking and explains how regulations such as occupational licensing can become powerful tools for self-interested individuals to extract rewards that they would be unable to in the marketplace. After illustrating how free markets are virtually always superior to markets regulated by government intervention, he suggests ways that governments can improve things by intervening in those markets. It may seem that Wheelan is a leftist economics. But his actual success is that he was able to give a clear picture of how market performs in the new economic order. His says that wages

Marketing Essay Example | Topics and Well Written Essays - 3000 words - 10

Marketing - Essay Example ly highly competitive but also very difficult to survive due to high food prices; it is difficult for large retail stores like Tesco to provide substantial discounts. Moreover, research needs to carried out to determine what are the factors due to which the customers grocery habits are changing in favour of smaller stores as compared to Tesco. Porter’s five competitive forces model was developed by Michael E Porter and provides insight into the opportunities and threats that c corporate strategy should cater to. The Five competitive forces are supplier bargaining power, bargaining power of customers, 1.Supplier Bargaining Power: In this particular case, since Tesco is selling may brands and is not dependent to a great extent on sales of any particular brand to keep people coming back for more, the supplier power is minimum. The customers perceive Tesco itself as a brand. Due to this the supplier power is minimized. Infact the suppliers themselves want to retain a good relationship. 2.The Competition (Competitive Rivalry): An article on U Talk Marketing.com identifies the current â€Å"chicken fight† going on between Asda and Tesco in order to maximize their share of the target market, the housewives, purse. The approach of Asda is to indulge in offensive price wars with Tesco with a â€Å"loss leading strategy, whereby the product chicken would be the loss leader product in order to drive more customer traffic to other product lines of ASDA. Tesco’s response is a no compromise on quality or prices approach.3This identifies the foremost issue of Tesco i.e. an overly competitive market in which survival is based on entirely the volume of sales rather than the profit margin per sale. 3. Bargaining Power of Customers: due to the highly competitive conditions, the ultimate power lies in the hands of the customers. The price focus in marketing strategies and the price wars are benefiting the customers and the customers choose the best value for money deal for their