Research Topics: Market Analysis

Deviation from the Model of Perfect Competition

I.Introduction In the onset of market development, companies nowadays seek to improve their standing in the market by maximising the advantages that they acquire from the market and at the same time minimise the inherent limitations that they possess. In this regard, some companies achieve a much higher market share as compared to other players while there are some who have no choice but to wind up their operations. The former characteristic is displayed by Chow Sang Sang. The following discussions will relate the operations of the modern market and how Chow Sang Sang takes advantage of it. II.Market Structures: Deviation from the Model of Perfect Competition In a perfect competition, several elements have to be present. For instance, an identical product should be present with every firm taking the role as price takers. (Meese 2005) In the same manner, a perfect competition allows only a small market share for every player as the products are identical and interchangeable. This is based on the reason that all the buyers are aware of the product that these players sell along with their pricing levels. Normally, a perfect competition consist of a market that has no barriers of entry, which means that every one who wants to penetrate the market will have ample opportunity to open shop. In reality, no company wants to stagnate themselves in a market with a perfect competition. In a profit-driven culture, staying in a perfect competition will never suffice to the needs of modern businesses. In the case of Chong Sang Sang, their grasp on the jewellery retail market is considerably strong with over 38 shops under the banner of Chow Sang Sang in Hong Kong alone. (Chow Sang Sang 2007) They have other shops in Mainland China and Macau. In addition, they control a certain number of other names in Hong Kong, namely Emphasis Jewellery and Midtown Jewellery.  Looking at this description of the company, Chow Sang Sang appears to veer off on the model of perfect competition as it uses diversification strategies to acquire a large par of the market. This is manifested in the creation of two other brand names that carry the same products of the company. As stated in their annual report, this two other stores tend to cater to other parts of the market, particularly different income brackets. To this end, the Chow Sang Sang is able to not only acquire a larger market share they have also expanded their client base to every spectrum of Hong Kong society.  III.Relationship of Market Forces and Organisational Responses             In its simplest sense, market forces and the changes that trigger it comes basically from the theory of supply and demand. In this context, one must realise that these forces makes the operations of the company interesting. (Skott 1996) It is these elements that make the crux of trading dynamic. In the case of Chow Sang Sang, being one of the leaders in the jewellery industry in Hong Kong, they have certain measures in dealing with these social forces. These organisational responses range from the company’s product to the reputation held by the organisation. For instance, the company realises that in their market, the products are essentially interchangeable. This entails attempts to establish product differentiation. (King 2002) This means that they have to show the consumers that their product is able to outperform its competitors by adding value to either its packaging or its overall contents. In the case of Chow Sang Sang, the designs of their jewellery tend to be in constant change so as to exhibit not only product differentiation but also product innovation. However, given that the major buyers and consumers of the company are those who could afford these luxuries, it is the preference of the Chow Sang Sang to establish a strong relationship with their existing clients so as to build a strong foundation for customer loyalty. (Minazzi 2003) In their case, the reputation alone of the brand name and the company ensures the consumers that they do have the top products in the market. IV.Behaviour and Competitive Strategies of Chow Sang Sang A.Organisational Behaviour             The company, as seen in the annual report of Chow Sang Sang, the inherent goal of the company is to gain considerable finances and revenues to sustain their operations. Basically, with the operational costs as well as the amount on which the raw materials are imported and consequently crafted, it is understandable why the company places profit seeking as a top priority. This behaviour is seen in the acquisition of the company of a shop at the newly opened Disneyland in Hong Kong. B.Competitive Strategies             As stated in the earlier parts of this paper, the company adds value to their products through differentiation schemes and establishing customer loyalty. This is manifested in the recent ad campaign seen in the website of Chow Song Song. Apparently, the new designs of the company allows for jewellery to be worn even during recreation or playing sports. In the same manner, the website also indicates that the company takes on a club for its previous and existing clients. To a certain extent, this is tantamount to the model of customer relationship management. Major players in other industries like in food retail has perfected the way of the membership card, a conduit to measure the capacity of the firm to not only forge bonds with its members but also to gather relevant and vital data that they could use for market research. C.Role of the Hong Kong Government             The consumers in Hong Kong, particularly those that have a penchant for something shiny and new, are ensured that the products that they are purchasing are not counterfeits but actual and unequivocal products of precious metals. The government of HKSAR requires that all products of this sort acquire a stamp approval. (Chow Sang Sang 2007) This illustrates that the HKSAR government provides considerable protection for its consumers, both local and foreign. V.Importance of International Trade, Economic Integration, and Global Markets             The accession of China, and ergo Hong Kong, to the World Trade Organisation is one of the integral points in global trade. Studies have long discussed the potential of the Asian market for western businesses. (Gao 2004) The WTO accession basically opened the doors for the liberalisation of products and services in the jewellery industry. This means that they would want to penetrate the market of Hong Kong. In the same manner, the accession of the state to the WTO afforded the company the capacity to import precious stones and metals that they need in a much lower cost. This is triggered by the similarly relaxed tariff rates that entails in the event of liberalisation. VI.Impact of China Policies on Business Organisations             The integration of Hong Kong with the Mainland gave Chow Sang Sang the opportunity to tap the said market with minimal obstacles. However, it must also be pointed out that the integration also affected some of the policies imposed to the administrative region. (Gao 2004) For instance, the importation of diamonds regulates itself with reference to acquiring precious metals coming from the African region, i.e. conflict diamonds. Moreover, being a member of the WTO, the Hong Kong market is also open to the entry of foreign companies and similarly renowned brands in the jewellery sector. To some extent this bestows a disadvantage to Chow Sang Sang as there is the possibility of having much greater and more capable competition with reference to Hong Kong’s market share.   Credit:ivythesis.typepad.com

Deviation from the Model of Perfect Competition

I.Introduction In the onset of market development, companies nowadays seek to improve their standing in the market by maximis...

KATIE KUDLER MARKET

Katie Kudler Market Expansion through Catering Service   Introduction             Considering an expansion for catering services needs number of resources in order to become successful. In addition, a number of factors must first be considered so as to adapt the establishment to current market and business trends. Thus, this marketing plan must first be done so as to assess the potentials of the project to succeed and to last. In this report, the project on the expansion of Katie Kudler Market will be assessed based on the restaurant environment. This plan aims to provide insight on the marketing mix which includes the description of the products, price, distribution, and promotion.   Marketing Design: Marketing Mix       Products and service designs it can be said that catering services can offer various products. For Katie Kudler, the products that will be offered are based on the needs of the target market within their market boundaries and community.  The catering facility will regularly serves meals and snacks the target market. Their services are rendered by having designated food personnel behind the counter to assist the customers’ food orders. So as to maintain the efficiency and speed of service, the food counter is made in such as way that both ends of the counter serve as the entrance to the food line. The center of the counter serves as the paying booth for food purchases. They also have telephone lines to cater services outside the store. Catering facilities have numerous strategies on how their rendered services can be better than competitors. Aside from maintaining speed in service, one of the aims of the catering facility is to serve food at its best quality. In order to do this, sanitary practices is an utmost standard operating procedure in the facility. Proper cooking and serving uniforms for the food personnel are provided. This does not only help in maintaining cleanliness in the facility but it also serves as a protective gear of the employees from kitchen hazards. Proper equipment that is available in the catering facility also helps in achieving food quality. Food heaters and chillers for instance, help in maintaining foods at the right temperature. Hence, this prevents food contamination. Using the appropriate kitchen tools in the facility also helps to cook and serve foods at its best (, 1995). This goal of the catering facility does not only facilitate in serving the customer appropriately, but most importantly it shows that the food service area prioritizes its customers. This in turn results to high customer satisfaction and loyalty.       Price The off-premise services rendered by the selected catering facility is only limited to buffets, cold platters and box lunches. Service charges added to the total food cost cover the costs of transporting food and supplies. At times, high-profile affairs are also serviced by the catering facility. While the cost of food items does not vary much from the standard for these high-profile affairs, excellent service is a must. Thus, extra costs are incurred for additional managers, chefs and waiters, which depend on what the affair requires. The facilities standard per person charges include food and labor as well as linen, china, flatware and other supplies. So as to make the catering service more affordable, the facility tends to maintain things simple. Typical events such as household parties and banquets benefit from this catering offer. Like other caterers, one of the common strategies of the catering facility is volume discounts. This common practice among caterers is applied in which per-person charges are reduced as the number of guests increases.       Distribution For the distribution process of the catering services, this part will consider the people behind the catering service for Katie Kudler. Personnel working in the facility include the managers, food servers, kitchen staff and dishwashers. For off-premise services, waiters and chefs served as the facility’s extra personnel. Each of these employees has their own designated duties and responsibilities in the area. This way, efficiency of service is maintained in the facility. In times when demands for services increases, the catering facility tries to cope up by conducting reliable forecasts. Records of previous catering operations are regularly kept by the facility so as to keep track of its daily activities. This aids the facility from predicting sudden increases of service demand. In order to cope with peak months for off-premise services, customers are advised to make their reservations ahead of time. Through this system, the facility is able to plan ahead for availability of food items, supplies, and personnel that will be used for the special events (1995).       Promotion In order to promote the Katie Kudler catering service to market a combination of communication tools may be used. These will include the radio, online marketing, and printed advertisements. These tools were selected based on the catering services are the ones where the targets are highly exposed to. In this way, the manufacturer can make the most out of its promotional efforts. Most importantly, the aimed promotional outcome is achieved. The catering services will be promoted specifically in the newspapers and health/food magazines. As the target markets have access to these reading materials, this promotional tool was selected. In addition, these publications are useful or interesting to the targets; hence, they are likely to read the printed Katie Kudler catering services advertisement.  Another approach is through online marketing. This promotional tool was selected not only because the target markets of the beverage product is exposed to this medium, but also because this tool is easy to do and not as expensive. Aside from being a promotional medium, the internet is a tool for marketing communications as well. Due to its interactive nature, the internet is an efficient method used in communicating with the consumers. Hence, several companies are beginning to realize the advantages of using the internet as a tool for communication. For the catering services, the management will use two forms of online marketing. One is through the company website promotion, and the other is through online newsletters sent through e-mails. Though it will be difficult to cover a good market size with these promotional instruments, internet and e-mail use is very accessible. Moreover, schools and work sites have online services, which potential target markets can have access to. Previous studies have noted (, 1989 and 1993) that the combination of various advertising media like newspapers, radio and television results to an optimized promotional effect. Recent literatures have also considered this promotional strategy as an integral component of marketing and communication strategies in several companies worldwide (, 2005). The IMC approach has been beneficial to several companies as it helps in identifying the most useful and appropriate methods in communicating and establishing good customer relations, including good relationships with stakeholders like the employees, investors, suppliers interest groups and the public in general. As this strategy utilizes multiple means of product promotion, a larger market have access to the company’s marketing efforts. In addition, using such strategy enables the use marketing means that are available and affordable to the company; thus, this strategy is effective as it promotes flexibility and resource optimization.   Conclusion Putting up a restaurant business is a difficult task due to the number of factors one must consider. A number of challenges will be encountered during the process, which needs alternatives and immediate resolutions. Thus, in order to assess the potential of the business for success, it is important that various criteria are taken into account. While it may take a lot of resources to put up a catering service, the benefits that it can provide can eventually outweigh the expenses. Aside from that, the food services offered by the company will definitely increase in quality, hence, greatly contributing to the goals of the facility. Through careful and effective planning, budgeting, and implementing, Katie Kudler market can commence on little changes, improving the facility one step at a time. The important thing is that constant adaptation to change is being done and that the company catering facility is coming up with ways on how to improve their services better.   Reference   Credit:ivythesis.typepad.com

KATIE KUDLER MARKET

Katie Kudler Market Expansion through Catering Service Introduction Considering an expansion for catering services ne...

THE SINGLE MARKET IS AN ESSENTIALLY LIBERAL ECONOMIC PROJECT: ESSAY INSTRUCTIONS

THE SINGLE MARKET IS AN ESSENTIALLY LIBERAL ECONOMIC PROJECT: ESSAY INSTRUCTIONS

Well structured i.e. has an introduction to establish its themes, develops its arguments in a logically ordered and coherent fashion, and ...

THE SINGLE MARKET IS AN ESSENTIALLY LIBERAL ECONOMIC PROJECT. DISCUSS

The single market is an essentially liberal economic project   A Report                                   Table of Contents Introduction   Overview of the Topic   Discussion             Definition of Single Market             Benefits from the Single Market It’s Significance to Economy             Conclusions   Reference                       Introduction The single market is a type of customs union which has common rules and policies concerning regulation of products and he four aspect of production. (, 2007). Every business organization or company has different internal organizations, having a variety of functions. The internal organizations that comprise the whole business are interrelated and are working together to ensure the company’s success in profiting from the market. The more functions each of the organization perform; the better is the performance of the company as a whole. This gives each of the companies their corresponding advantages and benefits from the market and their consumers. Also, every company has a need to be overseen by something much greater. This is where corporate governance comes in.  In this paper, we shall view the different theories that are part in explaining and proving the connection between effective corporate governance to the behavior and performance of the company.   Overview of the Topic Competition, typically the most powerful external force, is increased by the advent of globalization. The number of companies and the number of countries where these companies operate and the way governments are dealing with the impacts of globalization is accelerating. The interaction of changes in government policy and business innovation has actually made globalization even faster. If a company does not become a global, it would simply be shut out of new markets. This is what pushed firms around the world to adopt Corporate Governance. Also, a company must be able to make contact with its consumers. According to most theories on strategic management, the customer is the ultimate judge of competitiveness; that is, by buying the products of a firm, the customer indirectly decides which firms will continue to exist and which firms will go bankrupt. (2002). The reasons for the turmoil are numerous: a sputtering economy, increased global competition, the implementation of new technologies that displace jobs, the deregulation of certain industries, and the general consolidation of other industries, such as banking and health care. Observers will see a continuing progression in the ruinous steps which have forced the industry into a socio-politico-economic corner. The industry is likewise linked closely to the policies of governments, the earnings of banks. The industry’s approach to dealing with political institutions has not always been brilliant. It tends to be good on technical issues, although it has not always fully presented the longer-term options, in order to make the choices and their implications clear. In this paper, single market will be subjected to research. But before tackling the topic of about single market, first, one must define what single market is. Again, as was defined earlier, single market is a type of customs union which deals with the four factors of production and regulation of products. (, 2007).             According to BBC news, the single market started to move at around 1993, regulating the production, the freedom of movement in the goods, the people and services. (, 2001). According to Wikipedia, there are at least three (3) existing single markets as of today: Ø      The European Union (EU) – started out as the European Economic Community in 1957 and legally became a single market in 1992. Ø      The European Economic Area – includes EC, Norway, Iceland and Liechtenstein. Ø      The Caribbean Community Single Market And there are at least six (6) proposed single markets: Ø      Economic Community of the West African States (ECOWAS) Ø      Central African Common Market of the Economic Community of Central African States (ECCAS) Ø      Gulf Cooperation Council (GCC), due in 2007 Ø      Southern African Development Community (SADC), due in 2012 Ø      ASEAN Economic Community (AEC), due in 2020 Ø      African Economic Community (AEC), due in 2023 (2007).             Discussion Definitions of Single Market             Again, as was mentioned before mentioned, the single market is a type of customs union which has common rules and policies concerning regulation of products and he four aspect of production. (2007). The single market was established in 1993 in the hopes to regulate all the essential factors in the union. According to BBC, the single market was set-up for four main reasons: Ø      Goods: companies can sell their products anywhere in the member states and consumers can buy where they want with no penalty. Ø      People: citizens of the member states can live and work in any other country and their professional qualifications should be recognised. Ø      Capital: currencies and capital can flow freely between the member states and European citizens can use financial services in any member state. Ø      Services: professional services such as banking, insurance, architecture and advertising can be offered in any member state. (2001). These factors are somehow related to the factors that helped the setting up of the European Union (EU), or any customs union, for that matter.             But what is a customs union? A Customs Union is  and International organization whose goal is to remove all trading barriers for members of the organization and to have an unvarying tariff for nations who are not members of the said organization. Usually, countries set up customs unions to speed up economic efficiency and to strengthen ties between member nations. According to the Mission Statement of the European Union (EU), “One of the primal roles of the Customs is to facilitate trade and to protect the interests of the community and its citizens. “             Part of the mission statement of the European Union (EU) is stated in the following: “Customs in the European Union – A Joint Mission Statement:                                                                                                        Customs is responsible both for protecting society and facilitating international trade through the management of external borders and by ensuring overall supply chain security. We are committed to:   Ø      Ensuring the safety and security of citizens Ø      Protecting the financial interests of the Community and its Member States Ø      Protecting the Community from unfair and illegal trade while supporting legitimate business activity Ø      Increasing the competitiveness of European Business through modern working methods supported by an easily accessible electronic customs environment. Ø      To carry out these duties, we shall co-operate nationally and internationally to combat fraud, organized crime and terrorism in collaboration with other authorities, notably with other law enforcement agencies. Our aim is to operate with integrity and provide the highest possible level of service.” ( EU).   Benefits from the Single Market According to the DTI in the UK, here are some benefits that a member country can receive from a single market: <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> The Single Market is a wider market for UK goods comprising nearly 380 million consumers and making up almost 40% of world trade. Such a huge market gives consumers greater choice. </li> </ul> <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> The greater competition and liberalisation the Single Market has helped bring about has led to lower prices. Take air fares for example: cheap airlines such as Easyjet would not have been possible without the Single Market. Also airlines can now fly where they want, without national restrictions. This has helped British Airways become the second largest domestic airline in France. </li> </ul> <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> The Single Market provides for better consumer protection; for example the Toy Directive means that all toys sold in the EU must be safe for children. Another example is the Fourth Motor Insurance Directive on which political agreement was reached by Member States in December 1998. This Directive will make it easier for those involved in motor accidents in other Member States to make an insurance claim when returning to their state of residence. </li> </ul> <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> The Single Market principle of mutual recognition of standards means British manufacturers can sell their products all over Europe without expensive re-testing in every country. </li> </ul> <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> For business there has been a significant reduction in export bureaucracy. The Single Market is in effect a domestic market for European business. </li> </ul> <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> UK citizens have the right to work, study or retire in all the other Member States – there are around three-quarters of a million Britons living in other countries. ()</li> </ul>   It’s Significance to the Economy             The single market has a great impact upon the economy of many countries that participate in the single market.             With the above statement of the EU, we could see that all the member nations, whether exporting or importing, would greatly benefit from forming a customs union. Let’s try to discuss the different points of this proposition.             Ensuring the safety and security of citizens. Here is a feature that will greatly benefit a member nation. The customs is, according to the mission statement of the European Union (EU) the Union ” are in front line in the fight against fraud, terrorism and organized crime.” The customs is not only concerned with business, they are also concerned with the welfare of the citizens of their member nations. This feature of the mission statement is clearly designed to protect the people from illegal businesses that may cause a fall-out on their own businesses and also to protect them from terrorism and other such vicious attacks. Protecting the financial interests of the Community and its Member States. The union can give people better protection from illegal businesses that may cause problems for their businesses as well. The community or the member nation has a higher chance of having a very good trading partnership with other nations because it may have the capability to solely address the needs of the other member nation. And, the member nation’s interests in trade are protected from illegal traders. Protecting the Community from unfair and illegal trade while supporting legitimate business activity. As mentioned earlier, the member nation is ensured of a trading partner and is rid of the fear that an illegal trading group may take away its chances of having that trade with that target nation. The business activity of this member nation will eventually flourish with the help and aid of the customs union. Other illegal activity is suppressed in the said union and the member nations are assured of fair and legal trade with each other. Increasing the competitiveness of European Business through modern working methods supported by an easily accessible electronic customs environment. If this mission statement is applied to other unions as well, it may mean the same thing. Through modern technology, business may further flourish and would be easily accessible by member and even non-member nations. Through the advent of computers and the electronic mailing system, business of unions can be easily brought to the world and further trade would be done through this. Having customs union is like being part of a group and being sure that you don’t get left out. Customs Unions around the world are facilitating agreements for easier trade with each other and for combating and finally eradicating illegal underground businesses. They are also aiming to suppress terrorism which is, as of the moment, very much at large. Negotiations on countries that have long closed their borders to foreign trade are slowly gaining pace and are well on the way to once again, open to foreign trade. Commerce existing at the micro level is also benefited from this undertaking. Due to the fact that macro traders depend on small scale industries to provide them with the necessary materials for their own production, micro scale businesses aren’t necessarily left out of the foreign trade industry. Instead, the products that they are producing might be exhibited internationally and may have a potential buyer. Therefore, as shown in the presentation of the data that I gathered above, customs union is a really very good thing to have for both exporting and importing countries due to the fact that it may not only reduce or even abolish trading barriers within the union, it may even also find for a member country a potential trading partner which will in ways more than one, elevate the state of their economy.               Also, according to Wikipedia,  “A single market has many benefits. The central benefit is the increase of division of labour and the consequent increase in productivity. Other important benefit is, with full freedom of movement for all the factors of production between the member countries, that the factors of production also becomes more efficient allocated, further increasing productivity.” (2007). But also, the single market can have its criticisms as well. A single market could lead to further competition since many more potential producers sell the same product.             “A single market can be criticized for a couple of reasons. The transition to a single market from a monetary union can have short term negative impact on some sectors of the economy due to increased international competition, resulting from the loss of sovereign-nation economic control. This loss of control persists, and certain infant industries may no longer be feasible.” (2007) Also, the single markets works with a set of rules to follow. In the Review of the Single market, we can see the rules to which the participants must abide.             “A framework for ensuring the even and effective enforcement of Single Market rules has been established, involving encouraging co-operation between national administrations, setting up contact points for businesses and citizens, and improving the efficiency of the Commission’s complaints procedure. In the UK, the DTI’s Action Single Market – UK Solvit acts not only as a contact point for UK business and citizens but also as a first port of call for similar units in other Member States when Single Market problems arise. There are a number of options open to businesses when, in the course of marketing their products in another Member State, they consider that they have encountered trade barriers related to national regulations. This problem solving network seeks to enable businesses to exercise their Single Market rights and various options exist including making a confidential complaint directly to the European Commission, who may, where appropriate, take legal action against the Member State concerned (known as infraction proceedings). “ ()   Conclusions             Therefore, the single market is a very beneficial, and essential factor in the liberal economic project since it deals much with regulation of the four basic factors which are: Ø      Goods: companies can sell their products anywhere in the member states and consumers can buy where they want with no penalty. Ø      People: citizens of the member states can live and work in any other country and their professional qualifications should be recognised. Ø      Capital: currencies and capital can flow freely between the member states and European citizens can use financial services in any member state. Ø      Services: professional services such as banking, insurance, architecture and advertising can be offered in any member state. (, 2001). Also, the single market would be able to help, not only economically, but culturally as well.                         Reference:   Credit:ivythesis.typepad.com

THE SINGLE MARKET IS AN ESSENTIALLY LIBERAL ECONOMIC PROJECT. DISCUSS

The single market is an essentially liberal economic project A Report Table of Con...

MONEY MARKETS: ESSAY INSTRUCTIONS

MONEY MARKETS: ESSAY INSTRUCTIONS

this must be word procssed, double spaced and have a well noted bibliography Credit:ivythesis.typepad.com

DESCRIBE THE MAIN INSTRUMENTS TRADED IN THE UK MONEY MARKETS

Money markets are the mechanisms that allow people to trade money for securities and other future-based consumption commodities to facilitate raising of capital, transfer of risk and international trade.  It differs from financial markets because it is transacted in short-term basis that usually lasts within one year.  The market operates such as the borrower will issue a security to the lender for the latter money that can be used for short-term financing while the former is required to pay the rent through interests or dividends.  Common money market instruments in United Kingdom are the bank deposits, certificate of deposit, very short-term fixed interest securities, and floating rate notes (). Bank deposits or deposit account provides banks to hold authority over the deposits for a certain period of time enough to address their investment purposes.  Usually, they impose quota and discouraging policies against the depositors who intend to withdraw such savings accounts for banks to have greater prospect to invest such in money markets or mortgages.  Parallel to bank deposits, certificate of deposits serve the same purpose for banks, including thrift and credit unions.  However, these is considered a time deposit, in effect, gives the depository bank exact period on which it could obtain on-hold of the deposits with little policies.  As such, banks have more leverage to use them in money markets.  These two money market instruments are the most common tool of banks participating in the money market wherein their short-term inclination as deposits are aligned with the returns imposed by money markets for participating .   Credit:ivythesis.typepad.com

DESCRIBE THE MAIN INSTRUMENTS TRADED IN THE UK MONEY MARKETS

Money markets are the mechanisms that allow people to trade money for securities and other future-based consumption commodities to facili...

Small Medium Enterprises

Introduction In the past two decades, small and medium enterprises (SMEs) have become one of the main targets of policies aimed at creating growth and employment in developing countries. Helping small firms develop is not an easy task, given the constraints that SMEs face. Many of these are due to lack of access to: <ul type="disc" style="margin-bottom: 0in"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Raw materials and components – owing to the absence of local suppliers, or an inability to obtain inputs from abroad; </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Finance – due to discrimination by banks or the high costs of dealing with a large number of small firms; </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Technology – if it has to be imported, or because the initial investment costs are too high; </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Product markets – either due to a lack of contact with market traders, or an inability to effectively market and advertise their products; </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Government – because of their limited political weight and bargaining power. </li> </ul> Problem faced by small firms: On their own, small firms find it hard to overcome these barriers. There is increasing evidence, however, that it is not the size of firms that is the major problem. Rather, it is their isolation – the fact that they are operating alone in a competitive environment. This is where networking and clustering can help. Solutions to small and medium firm problems: There is mounting evidence that clustering and networking help small firms to compete and grow. By working together, firms can gain the benefits of collective efficiency, enabling them to challenge larger competitors and break into national and global markets. Many of the most impressive examples – in Italy, Brazil, Pakistan, and elsewhere – have emerged largely spontaneously. But research suggests that governments can assist the process. The keys to success seem to be a customer-oriented focus, a collective approach, and a cumulative effort to ensure continuous, rather than one-off, improvements. Clusters and Networks A cluster is a group of firms concentrated in one geographic location and working in the same sector. Firms may or may not be actively collaborating. A network is a collection of firms working in cooperation, though not necessarily in the same place. Both types of grouping can give firms competitive advantages. There are two aspects to the ‘collective efficiency’ gains that can achieve: <ul type="disc" style="margin-bottom: 0in"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Local external economies – these are benefits, which occur purely from the concentration of firms in the same town or region. Such groupings attract local suppliers, giving all firms better access to inputs and raw materials, and helping create a pool of skilled workers. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Joint action – through firms consciously cooperating, or joining forces in business associations and other groupings. Joint action can bring a number of benefits. For instance, producer associations can help to open up new overseas product markets and increase small firms’ access to government support services. </li> </ul> Some of the best known examples of industrial clustering come from Italy where, in the 1960s and 1970s, there was a surge of growth in the Northeast and Central regions of the country, areas not previously associated with strong industrial capacity. In a number of sectors, groups of firms clustering together managed to break into very competitive export markets, establishing a strong position in world markets for shoes, leather handbags, knitwear, tiles, musical instruments, and food processing – and in the industries which supplied machinery to these sectors. They expanded production and exports at a time when large enterprises elsewhere in Europe were in decline. Perhaps most importantly, they had the capacity to upgrade their production. The close proximity of suppliers, component producers, and subcontractors, and the combination of intense rivalry between firms and cooperation in producer’s associations, seemed to drive whole clusters forward. Successful examples of clustering are not limited to Europe. Numerous cases also exist in Asia and Latin America, although they have only recently come under the research spotlight. Several are in India – for instance, the metalworking and textile industries concentrated in Ludhiana, the diamond industry in Surat, and the engineering and electrical industry around Bangalore. Mexico, Peru, Indonesia and Taiwan provide other examples. Two of the best-documented developing country cases are in Brazil and Pakistan. Governments Helps Most of these success stories came about without outside intervention, largely as a result of the efforts of individual groups of firms. For policy makers wishing to promote small and medium industry, they provide a tantalizing demonstration of what can be achieved when the energy and initiative of small firms is harnessed. The question is, to what extent can governments assist this process – either by fostering the growth of new, embryonic clusters, or by stimulating other forms of networking and inter-firm collaboration? It is too soon to provide a categorical answer to this question. Evidence from a number of countries, however, suggests that governments can indeed play a valuable supporting role. In Northeast Brazil, a public procurement scheme was used to stimulate the development of a new cluster, in this case a group of firms producing school furniture (see box). Starting from quite modest beginnings, the impact over five years was substantial. A contrasting example is the Danish Network Program, a government-subsidized initiative that ran from 1988-93. The idea was to promote networking between firms to help them face increasing international competition. A series of “network brokers” were appointed with responsibility for particular sectors. Their job was to help identify market opportunities, bring participants together, and assist in implementing new ideas. The main challenge was to overcome firms’ resistance to cooperation, and convincing groups to take ownership of their network.             The program was successful on several counts. It achieved a high uptake among SMEs (over five years, more than 5,000 enterprises became involved in forming networks), and it has helped many of them to compete more effectively. Although aspects of the program have been criticized, the approach used has sparked interest in other countries. Variations on it are being tested in the UK, Spain, Norway, Canada and New Zealand. A similar approach has been tried in Chile, where in 1990 the government agency, SERCOTEC, introduced an initiative designed to encourage networking between groups of firms, and provide a focus for channeling support to small firms. A series of sub-projects were established, each involving three stages: <ul type="disc" style="margin-bottom: 0in"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Preparation – in which officials work to identify firms in a particular locality, diagnose their problems, and establish the credibility of SERCOTEC; </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Consolidation – in which a manager is appointed to coordinate the network, act as an interface with various government and marketing agencies, facilitate the take-up of training and other support services, and develop better inter-firm relations; </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Independence – after three years, participating firms are expected to take on responsibility for the manager’s salary. The idea is that the benefits to the participants are great enough for private initiative alone to sustain it. </li> </ul> Although the program is still small, early results have been encouraging. Most participating firms succeeded in gaining access to new domestic or international markets. The majority of networks also showed the capacity to be self-sustaining. Government officials have been sufficiently encouraged to develop a new initiative designed specifically for exporting firms. These examples show that a collective approach to SME support can work, even in situations where previous linkages are limited. By working together, firms were able to improve their collective efficiency, increase their competitiveness, and enter new markets. In all three cases, the programs were able to overcome initial skepticism about the benefits of cooperation. For individually minded entrepreneurs, with an instinctive mistrust both of competitors and government agencies, this can be a significant hurdle. The Triple C Approach Comparing experience in different countries, there are three factors, which seem critical to the success of schemes aimed at encouraging the growth of small firms. To be effective, interventions need to be: <ul type="disc" style="margin-bottom: 0in"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Customer-oriented – efforts must be driven by the needs and demands of the customer. This forces firms to face up to underlying problems of competitiveness. The most successful interventions are those, which have helped firms to learn about their customers, and then introduce the changes and innovations needed to meet market demands. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Collective – outside assistance is most effective when it is directed at groups of enterprises, rather than individual firms. This means working with business associations, producer groups, and other industry alliances. Where they do not exist, support can be linked to the formation of such groups. This has two advantages – it is more cost-effective than assisting enterprises individually, and it helps to develop constructive relationships between firms, which can improve their efficiency and increase the potential for learning from each other. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Cumulative – one-off improvements are not enough; if firms are to remain competitive they need to be able to change and develop in response to new market conditions and new opportunities. The objective should be to help generate this capacity within groups of firms so that in the longer term public support is no longer needed. </li> </ul> Added together, these elements represent a fresh approach to SME promotion, which has been dubbed the ‘Triple C Approach’.   Credit:ivythesis.typepad.com

Small Medium Enterprises

Introduction In the past two decades, small and medium enterprises (SMEs) have become one of the main targets of policies aimed at creat...

MARKET STRUCTURES OF CHINA

MARKET STRUCTURES OF CHINA Major Factor and Cause of Existence Perfect Competition (Agricultural Sector)             China government is the actor that primarily ignites the existence of an independent and active agricultural industry.  The move released regionalization of agricultural output and ended the historical separation of value chain activities which prohibited farmers selling their products or creating their own raw materials.  At present, integration is pushed to most part of the country.  The method also includes the existence of agribusiness firms, mostly in coastal areas, initially numbered at 3,000.  They are responsible of providing needed information to all farmers that has yet to enjoy the promise of economies of scale when producing in an informed manner.  In this support, agricultural workers were transformed to a farmer-entrepreneur.  No more problems on where to source out expensive farm inputs because the state-owned firms provided them most of the supply.  In addition, the agribusiness firms bought any output, similar to contract growing, so that the farmer has no worries on where to market its products.  Lastly, technology transfer for quality output was made available including training to upgrade skills and knowledge on the usage of new developed technologies.             The state’s role is aimed to create an environment that would make the agricultural sector competitive.  The incentives of farmer-entrepreneur under the scheme served as motivation to produce at highest quality.  Otherwise, their output would not be purchased by the state-firms or will be priced in an inferior manner.  The hidden agenda is to make them competitive and take whatever pricing the state firms deemed necessary.  Obviously, pricing within state standards would result to a uniform pricing strategy.  Perfect competition is needed to bring out the best from the farmer-participants that will make long-term success to China through foreign investment and export.  As many critics ask to the country, “Who will feed China?” the question is rather a challenge to their government.  With a population that topped most of the food consumption statistics, China needs to produce quality products in order to gain international acceptance of their exports.  With this, the agribusiness firms are situated in such a way that it will prove to the foreigners that their food is worth buying, producing and consuming.           Monopoly (Shanghai’s Dairy Giant) The Shanghai Dairy Group Company (SDG) has a number of factors that made it a monopoly in the dairy market of Shanghai.  It owns the crucial and important factors of production.  It sourced out 60-70 percent of its inputs from its wholly owned subsidiary farms.  Although the remaining 30-40 percent is produced through sub-contracting, the provision of technology and training to the contractors established harmonious relationship that built the backbone of loyalty between the company and the small producers.  With these two examples, inputs are generally incorruptible from the hands of the dairy giant.  Economies of scope stemmed at the nationwide sales network of the company created the incentive to produce lower cost of additional output unlike other small firms.  Also, the ownership of a milk and milk powder production bases added the uniqueness of the integration supremacy of the firm.  In China, milk is not popular historically.  This fact made disincentives for other firms to construct milk factories.  However, Shanghai Dairy Group thought beyond short-term profitability which the later converted into market power.  Lastly, to finalize the large integration network of the firm, it also owns storage companies, distribution companies and retail stores saturating the market at all levels.  This power inherent to the company made it formidable in competition.  Seemingly, it could wipe out any competition that would dare its market leadership especially in Shanghai area.  The experience in the sector, knowledge of Shanghai market preferences, integration strategies, relationship with contractors and 5,000 level of labor force, it could be hard for new entrants to share the pie with the firm.  To note, although substitutes are present in the market, it accounted to a minimal 5% which probably settled through highly differentiated dairy products or those produced for a specific market segment (high-end consumers, certain manufacturing company, export requirement).   Monopolistic Competition (Foreign Fast Food Firms)             Although China is gifted with wide agricultural land and enormous labor force, it needs the penetration of the Western investors for western plate experience among others like fried chicken, pizza and other fast food offerings.  These areas were not yet tapped by the country that was presently limited in the traditional noodle and tea restaurants and expensive five star dining.  This made several foreign investors successful.  Most of them produced variety of foods to offer at reasonable prices.  To note, Kentucky Fried Chicken is named as the “as powerful and growing brand in China” and also considered as the most popular international brand.  Its prominence, however, is limited to fried chicken because pizza belongs to Pizza Hut and Papa John.  Although the two are known players in the fast food industry, KFC dilemma is also there major constraint to saturate all line of products in a fast food chain.  Monopolistic competition is comparable to perfect competition aside from the heterogeneous product offerings within the industry that somehow gives firms the capability to increase the price of its products and services.  The fierce competitor of KFC in China is McDonalds.  The latter has variety of prominent products that appealed greatly to the Chinese community like French fries which was accounted to increase the demand of potatoes from United States for years to come. Also, Mos Burger from Japan targeted the hamburger consumption allowing it to gather most of its sales through hamburgers.  In the pizza services area, Pizza hut and Papa John are considered close competitions.  The former offers relatively expensive menus because of the extra-ingredient added like the stuff crust while the other based on quality and strategic locations of its branches within cities.  Similarly other fast food firms, mostly foreign investors, are increasing in number in the country like Ronghua Chicken, California Fried Chicken, Care de Coral, Tieban Steak, Chalon and Hartz.  Their entrance to the market is characterized by perfect competition but rather their products are several.  From this, they select the line of product(s) where they could gain competitive advantage from others.      The increase in competition to exploit the expensive and limited traditional cuisines of most Chinese restaurants is largely caused by the loose intervention of the government against free-trade.  Consequently, monopolistic competition was the resulting product because foreign firms wanted to concentrate on one area of food service to prevent direct competition to a more established firms like KFC which penetrated the borders as early as 1987.  With such tactic, its product offerings gained added premium that somehow granted its control over price.  Added to the fast food business incentive is the concentration to a specific product, not totally withdrawing the line of homogenous offerings the same as industry competitors like beverages and desserts, by which marketing expenses are minimized in favor of the dearest product or service offering.        Oligopoly (Former State-Owned Communications Giant) The entry of China Railcom in the communications industry had toppled the prices of local and international calls including installation charges to low levels.  The decrease of its prices affected the pricing of contemporary few players like China Unicom, Ji-Tong Communications, China Netcom, and China Telecom.  Since the intent of the new entrant is to cut the national average with ten percent decrease in local calls and twenty percent in overseas calls, it signaled the need for other players to bring down prices.  It is no wonder that China Railcom had the liquidity and infrastructure capability because it was a former division of Ministry of Railways.  From the sole responsibility to provide communication services to the rail transportation industry, the company was grated authorization to serve the general public on 2001. The eminent competitive advantages of China Railcom are derived from the heavy investment of the government during its inception.  Because of this, the characteristic of an oligopoly market to bar a potential entrant did not affect the established infrastructures of China Railcom to penetrate the market.  It was also exempted to pursue heavy marketing to be known in the market.  The desirable qualities and requirements were inherited since its creation by the state.  Added to its intrinsic capabilities, it also offers a wide variety of communications services like fax, telegraph, network resource lease, public data transmission, Internet access, and wireless paging.  The internet provision of the firm was strengthened by its venture with Riverstone that made possible the upgrade of virtual services for several cities for audio to video offerings. Just like other market structure, oligopoly in China is manipulated by the government.  The move to privatize Railcom created a tacit collusion in which rivals in the industry were forced to react to the price leader other than other factors that could ignite competition like quality issues.  Formerly, the market of the firm is limited to the rail transport hindering its market power by the countervailing power innate to a single consumer.  But as it went public, the government investments poured to establish its railway connections that made it one of the largest telecommunication’s networks in China paid off.  Although threatening to the profitability of other oligopoly players, the entrance of Railcom produced positive gains for the public for low cost communication service.  Probably, this is one of the major reasons the government decided to privatize the formerly state-owned firm.                        Economic Efficiency, Equity Outcomes and the Role of the Government             From all the market structures, oligopoly is the most consumer-friendly.  Unlike in competition structures, there are several numbers of firms which the consumer would try to select the most significant value-adding products/ services.  The broader the market players, the greater the consumers’ effort to pin point the low cost or quality leader which could be limited and not attained because of transaction costs.  The position of China Railcom as former state-owned communications provider not only instituted its brand name in the minds of the population but also created its low-cost capabilities and prosperous infrastructures.  To maximize the important role of oligopoly, the government should try to multiply several examples of Railcom for the benefit of the local people on basic necessities and utilities.  In return, this strategy should guard private firms within the industry that would eventually resist the diminishing profits due to low prices and thus withdraw its investments.             On the other hand, perfect competition has biggest impact for a firm to become efficient at levels of value chain.  Unlike oligopoly and monopoly, perfect competition assures the existence of invisible hand in the free-market.  This means that no one could control the prices of commodities that signal the basic cause of competitive advantage, at least in price, which is producing at the lowest possible cost.  The idea posts maximization of factors of production.  As a result, the macroeconomic status of a country would reach its maximum potential.  Since natural or synthetic inputs are properly used, there is high occurrence of local surplus that could penetrate foreign markets.  However, the government must guard exploitation of natural resources especially the bodies of land and water.  To note, several explorations of mining industry had caused soil erosions.  These abusive acts could result not only of several positive returns but also negative externalities that could hurt the industry in the long run.             Third, monopolistic competition could be considered the catalyst of innovation in the market.  The desire of the firm to take advantage of a discovered technology or other business improvements could make the industry survive in the long run with different line of products and services to offer.  For a consumer, every breakthrough is undoubtedly crucial to their everyday life.  In addition, the emergence of information technology firms supplied the requirement of every industry to attain efficiency at work.  The importance of innovation is countless and has no boundaries.  Fast food chains tend to be creative and more customer-oriented through this kind of market structure.  In this case, the government should be strict on patents to avoid disincentive for innovative ventures like research and development endeavors of firms.             Lastly, monopoly is considered the least beneficial market structure in a macroeconomic view.  It brings down efficiency and innovation because it is unguarded and free from the competition.  Because of this, consumer-friendliness is unlikely to result because the control in prices could result to selfish acts to recoup investments or gain more.  Consequently, the government should guard if not make this market structure an oligopoly. .                            Bibliography Credit:ivythesis.typepad.com

MARKET STRUCTURES OF CHINA

MARKET STRUCTURES OF CHINA Major Factor and Cause of Existence Perfect Competition (Agricultural Sector) China government ...