What is Market Inefficiency?

            Market inefficiency can be termed as a state of affairs where the current market prices are not able to replicate the data with regards to demand and supply (Mankiw, 2009). It can also be explained as the price in the financial market that gives the impression of a distorted market hypothesis. This state can be caused by various factors such as unfair competition, deficiency in the market transparency and other factors (Mankiw, 2009).

            The main objective of investment on money that has been put on the stock market is to make proceeds. However, most investors do not stop at that; they also seek means of outperforming the market (Pedersen, 2015). It is vital to note that for the market to become efficient then the investors need to recognize the inefficiency in the market. Paradoxically, most of the investments that are aimed at taking advantage of the inefficiencies in the market are essentially vital in ensuring efficiency in the market (Damodaran, 2012).

            A good example of market inefficiencies is that of a monopoly market. This is to mean that when a firm has dominant access to products or services, then the firm is able to control the prices and the distribution (Damodaran, 2012). This causes market inefficiency by the fact that the regular market forces are not able to determine and control prices in the market.  In a case where there is a control and the marketplace is resourceful, then the contestants will arise and the monopoly will be required to adjust the prices in relation to the market constraints (Damodaran, 2012). This will cause a temporary inefficiency as a result of the monopoly and can give room for high profits.

            The case of inflated goods is also an example of market inefficiency. When the market over values goods and products, then it means that there are increased prices (Pedersen, 2015). This mostly happens when the demand of a particular is high for a particular season and this causes the prizes to go higher. This market inefficiency is also temporary and as the demand recedes ten the market will allocate new prices for the same products (Pedersen, 2015).

            It is vital to note that markets will never be perfectly efficient. One of the major causes of market inefficiency is the advancement in technology that has caused the market to be faster and more liquid (Mankiw, 2009). There are various sources of market externalities such as limitations like price floors and price ceilings. This prevents the prices from proficiently apportioning resources. The transaction expenses also greatly contribute to market inefficiency (Mankiw, 2009). For instance, if the costs of holding and keeping trade are very high then the market cannot be perfectly efficient. Other sources are the limited production of merit goods and the over production of demerit goods.

            It is factual to understand that markets can never be entirely efficient or inefficient. In most cases we see markets that are a blend of both because not all information can be reflected in the stock markets on a daily basis (Damodaran, 2012). If the market was entirely efficient then the investors would seek to generate unusual proceeds and this would in turn cause the market to be inefficient. However, some off the internal and external externalities would be controlled in order to ensure that the market is efficient (Damodaran, 2012).

Conclusion

            The government should seek to interfere with the market especially in cases where there is strong market inequality especially that which is caused by regulations. This is because it will seek to reduce the inefficiency by reducing restrictions and also ensure that there is universal market equity. They also aid in breaking monopolies which are a major cause of market inefficiency.  

REFERENCES

Top of Form

Mankiw, N. G. (2009). Principles of economics. Mason, OH: South-Western Cengage Learning.

Bottom of Form

Top of Form

Pedersen, L. H. (2015). Efficiently inefficient: How smart money invests and market prices are determined.

Top of Form

Damodaran, A. (2012). Investment valuation: Tools and techniques for determining the value of any asset. Hoboken, N.J: Wiley.

Bottom of Form

Bottom of Form

UNEMPLOYMENT & INFLATION

New U.S home sales drop a sharp decline in the west is an economic news story that shows that the government should be actively involved in changing and stabilizing the economy. This is evident due to the unexpected drop in single home sales that affected the west region. The decline in sales shows a steady improvement in the housing market. The sale of new homes is volatile from month to month since it is drawn from small samples (Mutikani, 2016).

The volatility of the market is caused by different factors that affect the economy. Inflation causes the volatility of the market in a manner that the value of the single family homes cannot be realized. With an increase in the price of the house, it will push the sales further downwards. An increase in the inflation will have a significant impact on the volatility rate (In Shome & In Sharma, 2015).

Government intervention will play a great role in regulating the market. To curb inflation the government has to implement fiscal policies that will result in the stability of the economy. Controlling the mortgage rates which are associated with owning homes will be a vital step together with the U.S Central bank that is expected to keep short-term interest rates unchanged( Mutikani, 2016). In order to make the issue of home ownership successful, the government has to see that the fiscal policies are well implemented that will enhance the stability of the economy reducing the volatility and inflation rates. The intervention of the financial markets that deal with Federal Reserve Policy will also see the implementation of the fiscal policies (In Shome & In Sharma, 2015).

Reference

Mutikani L; (2016) New U.S home sales drop on sharp decline in the west; Reuters

In Shome, P., & In Sharma, P. (2015). Emerging economies: Food and energy security, and         technology and innovation.

What is Consumer Segregation?

            Consumer segregation is the process by which customers are divided into different groups with people who fall under the same characteristics are based in a similar group. These groups are based on gender, age, common interests and habits (Shanmugasundaram, 2008). This process is also called customer segregation or client segmentation.

            Different companies normally enjoy customer segmentation due to the fact that customers are unique and different (Meyler et al, 2013). It is also evident that marketing would be efficient if the target group is smaller and specific. Consumer segmentation is also critical in ensuring that companies have in depth knowledge and understanding of what their customer preferences are; in order for them to know that which is most valuable for each segment of people (Meyler et al, 2013).

            Customer segmentation also allows marketers to identify the products that the new or the existing customer may be in need of and provide them thus gaining competitive advantage over other marketers in the same industry (Shanmugasundaram, 2008).. An example is the beauty and cosmetic industry where there is consumer segmentation and the companies are able to produce products specifically for ladies, others for men and others for the children.

The last importance of customer segmentation is based on the absorption of the purchasing power. This is achieved by price differentiation where developing premium segments that make customers comply with the higher prices level. These segments might be different from mass market by certain features such as exclusive services, additional points of sale and brands variations and others. Therefore, it is factual that marketers are given the power of absorbing the purchasing power of the customers thus giving them the price differentiation advantage. Additionally, this promotes price elasticity in the market which is the other advantage to the marketers since they can derive higher profit margins from their products.

References

Meyler, K., Fuller, C., & Joyner, J. (2013). System Center 2012 Operations Manager unleashed. Indianapolis, Ind: Sams.

Shanmugasundaram, S. . (2008). Customer relationship management: Modern trends and            perspectives. New Delhi: Prentice-Hall.

What is Strategic Management?

By definition, a strategy can be delineated as any implementation made by an organization in order to achieve one or more of its goals and objectives (Pearce & Robinson, 2013). Therefore, it is factual that a strategy can be regarded as large scale and a future-oriented planning that involves cooperation with the competitive environment in the process of achieving the planned goals and objectives.  Thus, strategic management is therefore delineated as a set of plans that encompass actions and decisions by an organization regarding implementation of policies that will yield to achievement of organizational goals and objectives (Pearce & Robinson, 2013). Strategic management encompasses identification and description of plans that managers ought to pursue in order to guarantee effective performance and yield to increased competitive advantage for the company. It is noteworthy that strategic management demands for future-oriented, complex and long-term decision making that requires participation of the management with the considerable resources. Furthermore, strategic management can be regarded as a three-tier process that concerns three levels of management which include corporate, business and functional levels (Pearce & Robinson, 2013). Corporate level of management concerns the strategies adopted by the executives at the top level of the organization which affect the general performance of the general company. Corporate strategic management activities include financial performance, acquisitions, mergers and human resource management practices. On the other hand, business level management includes strategies adopted by different departments in an organization for the welfare of the specific department. Lastly, functional level management includes plans adopted against the employees which might include subsidies and incentives intended to motivate the staff (Pearce & Robinson, 2013).   

For effective strategic management, the company should define its vision, mission, purpose and goals. The vision of the organization should cover the picture of the business for a period of not less than three years time with regard to size, appearance and customer base served by the company (Pearce & Robinson, 2013). The mission of the company should include what the company anticipates to achieve within a long-term period and should act as a direction and purpose served by the organization. Therefore, organizational goals should be set with reference to vision and mission of the company in a specified period of time (Pearce & Robinson, 2013). It is worthwhile to state that the goal must be time specific, challenging and realistic for the company to achieve.

Strategic management involves planning which ought to be future oriented in order to be more effective. Therefore, there are several benefits associated with having a future oriented plan in the business. These benefits include the following;

• It enables employees to focus on the key activities highlighted in the mission and vision of the organization
• Helps in managing the daily performance of the business
• Helps in management of exposure to external conditions such as competition
• The company is able to manage vulnerabilities which include economic and technological problems
• Promotes effective management of the cash flow

            Generally, the strategic process acts as an input for future decision making in the achievement of the organizational goals and objectives (Pearce & Robinson, 2013). This is based on the ground that strategic process acts as a basis of mission and vision of the company. Therefore, the effectiveness of the organizational performance is determined by the strategic plans made towards achieving the goals set. Therefore, making strategic plans for achieving future goals and objectives makes strategic plans an input for future decision making in guaranteeing future achievement of the organizational goals.

Reference  

 Pearce, J. A., & Robinson, R. B. (2013). Strategic management: Planning for domestic & global competition. (13th ed.). New York, NY: McGraw-Hill.

Consumer Segregation

            Consumer segregation is the process by which customers are divided into different groups with people who fall under the same characteristics are based in a similar group. These groups are based on gender, age, common interests and habits (Shanmugasundaram, 2008). This process is also called customer segregation or client segmentation.

            Different companies normally enjoy customer segmentation due to the fact that customers are unique and different (Meyler et al, 2013). It is also evident that marketing would be efficient if the target group is smaller and specific. Consumer segmentation is also critical in ensuring that companies have in depth knowledge and understanding of what their customer preferences are; in order for them to know that which is most valuable for each segment of people (Meyler et al, 2013).

            Customer segmentation also allows marketers to identify the products that the new or the existing customer may be in need of and provide them thus gaining competitive advantage over other marketers in the same industry (Shanmugasundaram, 2008).. An example is the beauty and cosmetic industry where there is consumer segmentation and the companies are able to produce products specifically for ladies, others for men and others for the children.

References

Meyler, K., Fuller, C., & Joyner, J. (2013). System Center 2012 Operations Manager unleashed. Indianapolis, Ind: Sams.

Shanmugasundaram, S. . (2008). Customer relationship management: Modern trends and            perspectives. New Delhi: Prentice-Hall.

Buying Decision Process

The act of purchasing is the only perceptible element in the buying decision process that is complex. This process also helps consumers to make quality decision in purchase.

Step one

            Identifying the need is the first step to take in the decision process.  This is because, if there is no need, the purchase is not necessary. This need is the difference between the desired status of the consumer and the actual status (Pride & Ferrell, 2010). The item of purchase comes to fill in this gap.  For example, the ability to reach a destination by car is 20 minutes and four hours in transit. The desire to save time is the need for the purchase.

Step two

            After identifying the need, the consumer is required to search information about the potential solution she or she has (Pride & Ferrell, 2010). The intensity of the search is determined by the complexity of the choices. For example, purchasing sugar requires limited information than buying a car. This will help the consumer locate the item of purchase from different suppliers and any other information related to it.

Step three

            After information is gathered, the consumer then takes time to analyze the different solutions and assesses the one that suits the needs most. In this case features and functionality are also evaluated alongside brand and value (Dibb & Simkin, 2008).

Step four

            The consumer has now identified the product of choice and is required to decide on whether to purchase it or not (Dibb & Simkin, 2008). For instance, if the consumer has decided to buy a Mercedes X5 car, then they go the seller and purchase the car.

Step five

            This comes after the product has already been purchased. The consumer then evaluates whether the product has served its purpose and solved the need (Dibb & Simkin, 2008). They will also consider if they made the right decision or not. This helps to influence future decision of purchase.

Importance of the buying decision process

The process is of great importance o customers because it enables the consumers to be able to purchase the right quality products as it enables them to search information about the products (Pride & Ferrell, 2010). It also helps people to avoid impulse buying as before purchase decision process is critical. 

References

Pride, W. M., & Ferrell, O. C. (2010). Marketing. Australia: South Western Cengage Learning.

Top of Form

Dibb, S., & Simkin, L. (2008). Marketing planning: A workbook for marketing managers.            London: South-Western Cengage Learning.

Bottom of Form

FORMS OF BUSINESS IN VIRGINIA STATE

            Virginia State has Limited liability form of business. To form such a business there are requirements that are supposed to be meet. There are reasons as to why members or owners may want to form such a corporation mostly because of limited liability and its life. The process of forming one involves picking a name that will not infringe the trademark of another. Preparing the articles with the Virginia state corporation commission. Nominating a registered agent of Limited Liability Company. An operation agreement must be drafted before operation kicks off. Having meetings and preparing minutes must also be done alongside obtaining Employer Identification Number (Martin, 2011). The whole process is done carefully because the life of such a corporation is not limited by the state. The operating agreement of the company dictates whether the organization will continue with its operation perpetually or whether it will be dissolved upon completion of its project or at a specified time. It is dissolved and its operation wound up at a given time or upon the occurrence of an event in the articles or operating agreement (Martin, 2011).

Limited Liability Partnership is another form of business. In Virginia state the limited liability partnership is formed a registration statement is filed with the Virginia state corporation. Its life is determined by the partners in the partnership and the trend of business (Martin, 2011). The profits realized will contribute to the continuity of the business. This is because if there are constant losses then the partners will be unwilling to eject their funds into the project. This is determined by the profit and loss sharing ratios. Malpractices, partner’s negligence, and partners determination affects the life of the business (Martin, 2011).

Reference

Martin, A. R. (2011). Limited Liability Company & partnership answer book. Austin [Tex.: Wolters Kluwer Law & Business.

E-Marketing Competitive Analysis Tentative Time Table

Assessment Introduction

Product: Asus Intel core i5 laptop.

Model: Intel Core i5 5200U (2.20 GHz)

4 GB DDR3L Memory 500 GB HDD

Intel HD Graphics 5500 1366 x 768

Windows 10 Home 64-Bit

DL DVD±RW/CD-RW

Price $402.99 + Shipping (Terms and conditions apply).

Cost. $399.99

Promotion: Free shipment for members within three days.

Communication: Online through the company’s website (Monippally, 2013).

Place: On the company’s website.

Convenience: Shipment done within 5 business days (Carswell, & Hurley, 2015).

Possibilities

Recommendations

The company should have allowed the customers who buy goods on the first day of the week get a free shipping too within 3 – 5 business days. This could have attracted the attention of many clients thus being it easy for the company to attract many customers. Furthermore, clients could have been allowed to enjoy a free shipment on the purchase of the product from the company for the first time (Monippally, 2013).

Lessons Learned

Customers are mainly attracted by promotions, promotions create the awareness of a product thus making many people to buy the goods. In addition, being a member of the company makes it easy for a person to be able to enjoy many offers and this consequently attracts new customers who tend to become members too (Monippally, 2013).

Executive Summary

Product:

How does the product compare to its competitors?

The product compares to its competitors because it has enhanced specifications which other laptops do not have. The laptop has a large internal storage capacity of up to 500 GB (Monippally, 2013). This can allow a person to be able to store large amounts of information without having any freezing problems. Compared to other ordinary laptops, it has a random access memory of 4 GB which makes it easy for the laptop to perform at a very first speed without any problems. Ordinary laptops have a maximum random access memory (RAM) of 3 GB which makes it hard for such laptops to work in different conditions simply because they keep freezing (Carswell, & Hurley, 2015). The product has a 2.20 GHz processor which enables the computer to be able to carry out different tasks without crashing or otherwise freezing. Since the laptop has a large storage capacity, a good random access memory speed of 4 GB, the laptop can be used to do any type of jobs. This jobs include, storing information, for music and entertainment, and in the cyber cafes. The laptop has very good specifications but its price is also customer friendly and this makes it to outsmart its competitors in the market.

What features sets the product apart from its competitors?

This product has a lot of advanced features making its competitors not to match it (Monippally, 2013). The following are the features which make the product to stand out from its competitors: large storage capacity of up to 500 GB, large processor of 2.20 GHz, a high random access memory of up to 4 GB and an Intel core i5. The laptop can therefore be used by anyone regardless of the type of job. This is because has a very processing speed and it cannot therefore freeze when being multitasked. Furthermore, its hardware components are very strong and durable and they coordinate well with software components thus making it easy for the laptop to carry out different commands in a very good way. This features make the laptop very convenient since it guarantees good performance in any time of jobs (Mintzer, Arden & Entrepreneur Press, 2014).
What needs does the product satisfy for customers?

The product satisfies storage needs, first speed needs, durable hardware needs and convenient need. This is because most customers are mostly concerned with laptops which can be able to process information within the shortest time possible, can be able to store large sums of work, and is durable and convenient (Monippally, 2013). This is therefore a laptop which can be depended on since it has specifications which customers are loo for. Most laptops which have a large storage capacity of up to 500 GB tend to have small RAM speed of 2 GB. This makes the laptop very inconvenient since it freezes when the storage capacity is almost full. This makes it hard for a person to be able to work effectively because the laptop keeps on freezing thus limiting the type of work output (Carswell, & Hurley, 2015).

What quality is expected of the product from its particular brand?

            The product is expected to provide the following quality requirements: high definition graphics, good sound output, very first processing speed, high storage capacity, and a long lasting experience (Mintzer, Arden & Entrepreneur Press, 2014). This laptop has a very good screen resolution which makes it to be able to provide a high quality screen resolution. The laptop also has a 17.5 inch screen and this makes the view of the laptop to be good since it is wide and it also produces high quality videos (Ledford, Tyler & Teixeira, 2013). The laptop has good speakers which enable it to produce very perfect audio. The high quality speakers perform very well at whatever volume, and this protects them from getting spoilt thus providing good sound output. The laptop has a 2.20 GHz processor, in addition, it has a 4 GB RAM which works hand in hand with the processors in making the laptop to be able to process information at a very first speed thus preventing it from freezing (Monippally, 2013). The laptop has good hardware components which strong and durable. The hardware components also work well with the windows 10 operating system thus making the laptop to provide a very long lasting experience.

What type of additional product support/warranty is attached with the product?

            The product has a warranty of up to 1 year. This makes the user to be free while using the laptop since it can be able to serve him or without any problems (Monippally, 2013). In case of any problem before the warranty is over, the customer can return the laptop to the near care centre where it will be fixed free of charge (Ledford, Tyler & Teixeira, 2013). On the other hand, the support offers free upgrades thus the customers can be able to upgrade their laptops free of any time after buying the laptop. In case the product gets spoilt while being shipped, the support team will take care of the problem. The customer will therefore be able to receive additional support which will make him or her to use the use the laptop in a very convenient way without the fear of not performing well (Mintzer, Arden & Entrepreneur Press, 2014).

Price:

Are there discounts offered for the product if “add-ons” are purchased?

The company offers a one year premier membership and a refund of $25 when one uses the American Express Card (Monippally, 2013). This not only allows the customers to be able to enjoy the membership of the company, but it also allows them to be able to get $25 off the products that they will be purchasing from the company. The company therefore allows the customers to be able to enjoy its services if the add-ons are purchased hence attracting more customers to the product (Carswell, & Hurley, 2015).

Is the product on sale?
            The product is currently on sale and it can be bought on the Newegg online shop. The price, and the specifications are listed the company’s website hence can be able to know how much it costs and what the product contains. The website offers all details of the product, moreover, it also provides the shipment information and the warranty covers. This ensures that the customer purchases the product knowing the process that it will take before he or she finally receives the purchased goods (Monippally, 2013).

What is the value of the product to the buyer?
            The product is very valuable to the buyer since it can enable him or her to be able to carry out different tasks using the laptop. The customer can use the laptop in many ways and this includes listening to music, it has a high quality sound and video graphics (Carswell, & Hurley, 2015). This makes it easy for the user to be able to carry out different activities at ease without any problem. The laptop’s performance is very good and the customer can be able to enjoy the services that it will offer him or her. The customer will also enjoy the warranty and the upgrades that the product may require. The laptop is very convenient and it can also be able to carry out a lot of tasks hence giving the buyer whatever results he wanted (Monippally, 2013).

Are accessories offered in the price of the product?

            The e-Competitor 2 is offered on the price of the product thus making it easy for a person to get both products when he or she was buying the laptop. The accessory comes with a discount of a certain percentage before being added to the product. Hence the buyer therefore gets the discount of the product and the laptop at the same time (Monippally, 2013).

Specific price for target audience?

The specific price for target audience is $399.99 + $2.99 for shipment of the product to the specified destination. The company therefore helps the customers to be able to buy their products without any problems since the goods are shipped to their home destination.

Promotion:

Are there advertisements?

The company advertises its goods Online, social media ads and on the television. Advertisements have really helped the company to be able to attract many customers (Mintzer, Arden & Entrepreneur Press, 2014). Furthermore, most people are also able to understand how convenient the company is thus buying products from the company. The social media has been the best platform which the company uses to advertise its products (Ledford, Tyler & Teixeira, 2013). The social media has therefore seen the company increasing the number of customers buying the products from the company (Monippally, 2013). The products company has also realized more profits from these advertisements thus making it easy for them to be able to reach their marketing goals.

Are there product reviews?  

The company allows a customer to rate the products that they have bought thus making it easy for new customers to review (Carswell, & Hurley, 2015). The customer also rates the services offered by the company up to five stars. After rating the services offered by the company, one is also allowed to comment thus providing the reasons as to why he rated the company according to the stars that e or she rated the company (Monippally, 2013).

Seasonal promotions for sales or discounts?

The company has seasonal promotions and discounts for different types of customers. The company offers different promotions and sales discounts to customers according to their group, whether they are students, women, or women. The discounts are therefore offered according to the type of promotions by the company (Monippally, 2013).

Can product ads be found in Search Engines?

The product ads can be found in the search engines thus one can be able to access full information from there hence being able to know how the product is (Ledford, Tyler & Teixeira, 2013). The search engines provide very detailed information thus making it easy for whoever is searching for the information to understand clearly how the products are (Monippally, 2013).

Competitor promotion schemes, similar or targeted?

            The promotions offered by the company are targeted, thus they are not similar to that of other unique people. This makes it easy for the company to be able to attract many customers because of its unique types of promotions (Mintzer, Arden & Entrepreneur Press, 2014).

Place:

Where can product be purchased?

            The product can be bought at the online website of the company. The company’s website has all the products that the company is selling (Mintzer, Arden & Entrepreneur Press, 2014).

Product availability offered

            The products are available in the company’s stores but can only be accessed online by the customers (Carswell, & Hurley, 2015).

Where can the product be shipped?

            The products can be shipped to any parts of the country except for the following areas: APO/FPO, AK, HI and PR, where the customers will have to pay more for shipment (Monippally, 2013).

Does online store have a customer service number to call and purchase product?

            This store has an online support system whereby customers can be able to send their questions. On the other hand, customers can also be able to communicate with the support in case of any problems that they might have encountered with the products that they had bought (Mintzer, Arden & Entrepreneur Press, 2014).

Reference

Monippally, M. M. (2013). Business communication: From principles to practice. New Delhi: McGraw Hill Education (India.

Mintzer, R., Arden, L., & Entrepreneur Press. (2014). Start your own e-business: Your step-by-step guide to success.

Carswell, R., & In Hurley, H. (2015). Test drive the Microsoft Private Cloud.

Ledford, J. L., Tyler, M. E., & Teixeira, J. (2013). Google analytics. Hoboken, N.J: Wiley.

How to Run a Family Business

Introduction

            A family business is a money-making entity where the sole decision making process is governed by a manifold cohort of family members (Weber & Pete, 2012). These people are normally related by blood or through marriage are very instrumental in the leadership of the organization or are key stake holders.

            As a result of advanced technology, online businesses have proved to be more advantageous and easy to operate. Family businesses that are run online are able to make maximized profits but however face several challenges (Chafkin, 2015). Building an online business is simple therefore allowing the starting up of the business easy. Nevertheless, this type of business faces several risks like conflicts in succession and emotionally attached problems (Chafkin, 2015).

            Online family businesses can be run successfully by ensuring that roles and responsibilities are accorded to each one according to their skills. It is very evident that skilled and proficient employees ensure efficiency of work. The employees should also be aware of their job specifications In order to allow all employees engage in their respective roles thus avoiding conflict (Weber & Pete, 2012).

            It is also critical to note that family businesses that put much emphasis on resilience have increased revenue in the long term than companies whose ultimate goal is performance (Chafkin, 2015). This is because they relinquish the surplus profits that is received during the peak seasons of business In order to better the chances of survival especially in the off peak seasons in business.

Conclusion

            From the information provided above, it is evident that family businesses are better placed than other models of business. It is very possible to run a success business online if the management of the company is able to ensure that business dynamics are implemented properly.

References

Chafkin, C., L.  (2015) How to Run a Family Business. Family Business

Weber, C., & Pete, E. (2012). The family business. Deer Park, N.Y: Urban Books.

Negotiation Plan Development

Identification of the primary supplier with whom to negotiate

This is the first and the important stage in the negotiation checklist that helps a firm to make the right choice of whom to negotiate with (Walton, Cutcher-Gershenfeld & McKersie, 2000). The firm should search for a supply with things needed in the firm. The firm should ensure that the person to negotiate with is qualified in order to handle negotiation with a lot of care. The firm should also identify the supplier who will negotiate basing on the existing terms of the firm.

Identification of alternative supplier to negotiate with

It is also for the betterment of the firm to have an alternative supplier. This helps out in case the firm and the primary supplier do not reach to agreement and due to the urgent demand in the firm; the alternative supplier becomes an option to negotiate with. Also, an alternative supplier can help in weighing the two sides and compare (Walton, Cutcher-Gershenfeld & McKersie, 2000). By comparing the firm is able to identify the supplier with manageable terms hence taking it as the priority for negotiation.

The kind of negotiation to use

Here, the firm must consider three circumstances. Whether the negotiation will be a one-time thing or it has to take place again and again. The firm has also to identify the kind of relationship that will be created during negotiation. If it is a long term, then the supplier will become a potential supplier of the business in the long run (Walton, Cutcher-Gershenfeld & McKersie, 2000). Under the kind of negotiation, the firm has to assess the situation on both sides for instance whether negotiating with the supplier can build a long term relationship or it will be taking place on temporal basis.

Challenges that can be faced in the negotiation

The firm must be ready to encounter conflicts in the course of negotiation. One can be caused due to differences in the views which may not result into agreement (Walton, Cutcher-Gershenfeld & McKersie, 2000). The second encounter of conflict is an existing trade dispute between the supplier and firm which basing on some differences hence leading to disagreement.

The reason for negotiation

The reason for negotiation between the two parties is to ensure that the agreement reached is fair to both the buyer and the supplier. Since both are business entities, both side expect to receive fairly in order to continue operating the business (Walton, Cutcher-Gershenfeld & McKersie, 2000). Therefore negotiation should ensure that the two sides are satisfied by the actions of the other.

Format of negotiation

Basing on the kind of business, the firm can decide on which format to negotiate with its suppliers in order to meet the essential elements of supplier negotiation (Fisher & Patton, 1992). Negotiation can be done either face to face or through phone communication.

Terms of negotiation

The firm has to negotiate with the supplier until the terms of payment are reached. This can be described by the methods of payment or the timing of payment which is favorable to both parties (Fisher & Patton, 1992).

A timeline for negotiation process

The negotiation process should start when the two parties have all the necessary requirements for the negotiation and they should have a specified agenda for the practice of negotiation (Fisher & Patton, 1992).

When to enter agreement

You should only enter agreement when you are sure of doing according to the suggested terms. And after reaching an agreement both parties should not show signs of excitement because this is an implication that the other side has been taken advantage of (Fisher & Patton, 1992).

The location of negotiation sessions

The place for holding negotiation sessions must be convenient and effective to both parties in terms of transport and safety.

References

Fisher, R., Ury, W., & Patton, B. (1992). Getting to yes: Negotiating agreement without giving in. Boston: Houghton Mifflin.

Walton, R. E., Cutcher-Gershenfeld, J. E., & McKersie, R. B. (2000). Strategic negotiations: A theory of change in labor-management relations. Ithaca, NY: ILR Press/Cornell University Press.

            Why Do People Lapse On Their Long Term Care Insurance?

            Long-term insurance care is a major risk of finance whether provided at domestic locations or at the nursing homes (Meyer, 2016).  Very few individuals however purchases  long-term insurance care and those that do buy a third of them with the long term insurance care will let the insurance care policies to lapse at the age of 65 years forgetting the benefits that they are bound to leap soon as they will highly required the money they invested in the premiums.

            Additionally those that are at very high risks of  requiring the care continue with the care while those will least risks allows their coverage to lapse. According to the recent findings those that utilizes the care services more   have the high probability of allowing their coverage to lapse despite them having a better  understanding of the associated risks  that they have in regard to their high need to  care (Meyer, 2016).  The latest study by the retirement research center concluded that individuals allow their coverage to lapse because of three major reasons which includes financial, strategic lapsing and forgetful lapsing.  The financial lapser’s reason thus indicates that those individuals who have lower incomes and are thus associated with less well are thus likely to allow their care coverage to lapse because of the individual burden of financially sustaining the insurance premiums.  This is mainly because in the first place he premiums were high at the beginning because off the household financial situation which may have worsened due to changes in the economy. This is facilitated by the decreased planned wealth which has thus made the more attractive which then changes when the individual has to continuously struggle to sustain the premium (Meyer, 2016). 

            On the other side those individuals that have higher level of wealth and higher generation of income have a reduced probability of allowing their care coverage to lapse.  This is because even with economic and financial changes their financial status permits them to continuously commit to the premium as there are no struggles with the payments since they can comfortably handle the premiums even when the payments are raised (Meyer, 2016).  The cost of living also affected individuals because since the cost f living and that of medical care is rapidly aising because of the advanced technology most individuals are therefore unable to handle because of the financial instability.  Those that take long term care coverage are thus bound to be suffering from chronic diseases which are expensive when acquiring treatments. Therefore the individuals are therefore required to pay to expensive premiums which may not be comfortable for them (Meyer, 2016).

            Another reason why individuals allow their care coverage to lapse is because of the strategic reasons. This is because the strategic lapsers  are those individuals who drop their premium payments commitment because  they exist in good health and therefore they draw the perception that they hold lower risks levels in requiring medical care than they had previously expected (Meyer, 2016). Mostly of the individuals acquires the care coverage’s with the view that they will require the assistance in the future because of the fact that as an individual grows old they are bound to be attacked by instinct diseases which may require a he amount of fiancés to sustain (Meyer, 2016). With time the individuals then realizes that they still exist in good health and therefore their premiums payment would therefore not help them much because they believe that they will not be requiring much services. This perception therefore makes the individuals to allow their coverage to lapse even if they are financially able of committing to the premiums payment (Meyer, 2016).

            The other reason is that most individuals fail in evaluating whether their coverage choices are affordable. This is essential because when coverage is affordable an individual is fully able to commit to it without allowing it to lapse because from the beginning they designed their premiums in ways which they would comfortably handle (Meyer, 2016).  This is essential I preventing losses of the benefits associated with the coverage’s.  In addition most of the lapsers fill in planning for how they be accomplishing their payments. In that they fail to develop and individual plan that will help them in ensuring that they do not delay their payments which makes it hard when the premium balances piles up totaling to large amounts (Meyer, 2016). This can this be accomplished by paying lump sum for those that are financially stable  instead of the monthly payments which may be hard to sustain because of the different payments that an individual is required t accomplish in a month.  This is therefore crucial in elimination unintended lapses in the core coverage as this would result to financial losses (Meyer, 2016).

            The other reason is that some individuals are forgetful lapsers (Scott, 2011).  According to the study an establishment was made that the forgetful lapsers are mainly influenced by the impairment of the cognitive. Most of the individuals do this unintentionally because their fiancés are held up in other activities. This can thus be termed as the lack of plan in which they individual fail to plan for their income distribution where they give some activities more financial priority than others (Scott, 2011).  This therefore results to poor decision making where they fail to make beneficial decisions o their covers as they focus more on the current activities that ignoring the future.  These individuals are therefore forced to forget to cooperate in paying their premiums because the value o their policy has been forgotten (Scott, 2011).

            Moreover individuals find themselves lapsing heir care coverage’s because they lack backups (Scott, 2011).  It is important to have an adult back up who can stand for the payments in case one is unable to fulfill the payments. This could be a son or adult who has the potential of taking care of the care premium. The lack of a back up leaves the payments uncovered for as there is no one to make the payments.  Having a back up is therefore crucial in ensuring that the policy lapse likelihood are eliminated and that the intended benefits will be achieved when required (Scott, 2011).

            According to various studies individuals who allow their care coverage’s to lapse are in high need of the long-term care especially those individuals with cognitive impairment (Scott, 2011).  For several individuals they buy the premiums when they have lower risks of requiring medical care and drop it at the time when the need is almost arising. This is therefore a disadvantage to tem because they not only forget the associated benefits but them also but also they may be forced to spend their retirement assets aggressively in order to be able their coverage’s (Scott, 2011).

            References

Meyer, D. J. (2016). The economics of health.

Harstad, Scott. (2011). Live It Up!: But Don't Outlive Your Income. W & A Pub.

Succession Planning

It is factual that many organizations in the contemporary business field are failing to address the issue of succession planning. This is a similar case that happened to Microsoft Inc., after the retirement of Steve Ballmer (Microsoft, 2014). The company had a poor succession planning that it took them time to appoint Ballmer’s successor. This delay affected marketing strategies implementation for a whole year. One of the reasons why many organizations do not focus on succession planning is due to the fact that they have few staff members and are facing other organizational challenges that need to be prioritized (Dahlke, 2012).

Benefits of Succession Planning

Ensures organization of the management staff which enhances service continuity 

Promotes continued supply of qualified and motivated personnel to the organization

Succession planning acts as an alignment between human resources and organizational objectives

It acts as a motivation to the employees as it promotes career development

It helps the organization to recruit and retain qualified employees

Principles of Effective Succession Planning

• Prompt planning before the retirement date of the employees
• Focusing on practices, procedures and policies instead of personalities
• Taking succession planning as the management responsibility not just employees
• Succession planning should comply with current staff policies
• Succession management quality is proportionate to the new employees’ quality

Practices in Effective Succession of Managers

It is factual that if the organization has effective governance practices, succession planning involves use of current practices instead of introducing new ones. Therefore, the following are some of the practices that determine successful succession.

1. The strategic succession plan ought to convey the mission and current priorities of the organization
2. Thorough evaluation of the employee particularly on the annual basis
3. Updated personnel management policies that concern hiring, firing and supervising employees in compliance with employment laws
4. Regular personal reports regarding their roles and contribution within a specified period of time
5. Arrangements on incentives and subsidies that allow free replacement on employees though on a short period of time
6. Implementation of fiscal policies that enhance financial oversight
7. Holding annual discussions with employees on matters regarding their opinions on the effective succession planning for the organization

Steps towards Making a Successful Succession Planning 

1. Identifying the most crucial positions in an organizational structure
2. Identifying the competences that determines the capabilities for successful performance in different management positions
3. Recognizing the most appropriate succession planning strategies for the organization
4. Implementing and documenting the succession plan
5. Using the effective control measure in order to evaluate the effectiveness

References  

'Lessons learned from Microsoft's lack of CEO succession plan' 2014, Insidecounsel, 24, 263, p. 10, Business Source Complete, EBSCOhost.

Dahlke, A. (2012). Business succession planning for dummies. Hoboken, NJ, John Wiley & Sons.