Global Business Environment Case Study Solution
4. Pricing with Market Power and Non-Price Behavior
The pricing in market power is the dominancy of any company that can reflect the price in the market. However, Apple Inc. has the market skimming where the products are mostly for the elite class but it has the power to reflect the prices in the smartphone market. The non-price behavior is where the imperfect market competition where two or more firms have the same prices and sell the goods on quality. The pricing and non-pricing behavior exist in those economy where the market concentration is high and monopoly and oligopoly of the market occur. Mostly in manufacturing sector, the oligopoly exist and in service monopoly in global business environment.
5. Strategic Rivalry and Innovation and Disruptive Technology
Global strategic rivalry implies that firms acquire intellectual property and focus on their strategic decisions based on which they work to obtain competitive advantage in the market through using these efficient strategies. Investing in R&D makes the company’s to work increase their quality and produce according to the customer need and demand. Innovation and applying the updated business practices create the productivity and wellness in the business operations. However, disruptive technology brings the automation in the business like ecommerce, online selling, artificial intelligence etc. They all are the extra perks which make the significant change in the quality and service of manufacturing companies. The economy of a country is also affected because as the technology disruptors are included, the more they reduce the human labor and increases the unemployment ratio in the economy. The manufacturing sector has decline in employment and IT sector has increase in employment because of technological disruptive. (See exhibit 1)
6. Market and Government Failures
Government involvements sometimes creates the market failure. There are some factors which creates the failing aspects like if the government does not have the adequate information and standard policies, which raise the reasons of market failure. For example the micro economic inefficiency, poor management and control over the taxes and deficit budget. Sometimes, the government cannot take proper control in regulations and does not provide any subsidiaries. This creates reduction in the prices, which creates market effecting aspects. (Andrew, 2008). Like inflation increases and lack of supply when demand is higher. The market failure is co-related with the government policies and control. The government interference and poor management directs the lack market failure. (See exhibit 3)
7. Economic Growth and Stability - Impact on Business
The economic growth and its sustainability impact positively on business especially in manufacturing. If the economy of any country has stable condition and surplus budget to invest in the manufacturing sector, it gives the healthier position to businesses. The small and medium enterprises grow and new companies enter in the market. Moreover, the sustainability also implies the policies and regulation by government and also tax reliefs. (Kathy Fogel, 2006). The businesses expand where the economic condition is stable and empowers the industries. Ifa government provide well organized and structured system, it also benefits in the trade and foreign investments increase in the country. For example, USA allows the investment in businesses because it has the stable economy and the entrepreneurs initiate their which creates the broader gateway for many businesses to expand.................
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