Admission essay

Introduction

The scholarship program will provide an opportunity for me to study the Business Economics as my major. The program will enable me to embark on economics courses whose design aims at acquainting students with relevant knowledge that can have social impacts in the community and enhance my academic progress. The knowledge obtained while undertaking this case can help in understanding the economic situation of the local community, the related challenges and provide potential solutions and social benefits that can be obtained from the programs.  

Discussion

 The program will transform me into a student who is academically driven through the enhanced and more challenging curriculum. The aspiration to strengthen my character by enhancing the high standards of citizenship and collegiality makes me very fit for the scholarship.  The program will also go a long way in guiding and preparing me optimally for transition to university, which in turn will assist in my future goals Glendale (Community College, n.d).  The scholarship will not be just as stepping stone to greater things, but will act as a crucial experience in terms of academics. This will make me have an enriched present and build on my future. The academic drive focus means that the various challenges encountered while undertaking the programs will be overcome by a commitment to excel even amidst problems encountered. The commitment will provide the drive for achieving academic success so that the transition to university will be smooth.

 In addition, the Student Education Plan will be an important tool in ensuring that I attain my career growth since its updates will ensure that any required adjustment will be made and effects of various academic changes mitigated. The need to have an education plan will be indicated by my performance increases for the various courses that will be provided in the college. The scholarship program will, therefore, provide an opportunity that is focused on achieving the career growth and development that are intended by the academic theories and principles in business economics. My academic goals will be best understood if integrated with the Student Education Plan.

 Academically, the program will provide me with an opportunity to undertake a course that provides sufficient preparation and knowledge for understanding economic issues that are important to the local community, national and global society at large.  As a business economics student, I will be able to learn embrace critical thinking about various important economic aspects that are presently facing the world.  I will learn how to apply different theoretical perspectives to matters regarding economic efficiency and growth, poverty and wealth, social justice, freedom and cultural values and the various environmental concerns (Community College, n.d). Economics is quite concern with such policy issues and the scholarship program will help me with the necessary critical and analytical thinking skills needed to understand them and other problems that are facing the society. The requirement to have at least 3.0 GPA will be a great motivator for me to reach work towards my academic goals in the college. This will ensure that I remain in the priority registration by ensuring that I have a good standing by raining my GPA to the least scores required (Community College, n.d). This will be put under check by the various evaluations done at least twice per year so that any slip in performance will not be met by  good come back. 

 The program offers an opportunity that supports my efforts in preparation for a career growth at Glendale Community College.  The high standards of the program for academics and conscious maintenance of my Student Education Plan will be important in imparting the right economics knowledge and understanding.  I seek to active member of the program with a focus on observing the various requirements established in the scholarship contract.  The academic requirements for including a good academic standing will be a major motivating factor since it aligns with my goal to succeed in my studies.   The various designated scholars for every students means that the program will build on my past knowledge in business economics to produce an individual who is academically accomplished.

 The program will also instill some qualities of being useful to the community or society in which I will be living. That said, I can engage in various community focused activities that will be beneficial to others, even while I strive to accomplish my professional goals. This will be enabled by various activities that scholars are required to complete in the process of undertaking the program. Every student is expected to undertake 4 events aimed at providing community services with 1 being outside of the Scholars.  The student is also required to undertake 3 fundraising and 3 social events and completed the required duration in these events (Community College, 2018). Such activities will play a big role in developing social responsibility qualities that are important in dealing with various economic challenges in the society.

Of great importance are the great opportunities for growth in leadership skills that will avail in this program especially while attending the required meetings such as General Assembly meetings. The engagement in various society and community based activities will impart in me management and leadership skills that are critical as I navigate through my career journey, personal and professional development.  This will be enabled by the chance given for every Scholar to arrange events on their own and complete them within the soonest time possible, thereby returning to Good Standing in case of past failure. The other important skills derived from the program include collegial support and service to other people which serves the surrounding community.  I will be able to achieve this through offering support to other students in need of the scholarship by advocating for the continuation of the scholarship program. Every student is required to assisting in promoting the program every time and be a representative of the established levels of academic excellence (Community College, 2018). Through quality service provision, respect and integrity, mutual support, compassion and cooperation, the student will be promoting the program. Such support is very essential in highlighting the need for providing scholarship program for students who are willing to achieve academic excellence and career growth but are unable to do so.

Conclusion

 The scholarship program will provide an opportunity for me to pursue career growth in the field of business and economics. It will transform me into an all-round individual with a good grasp of economic principles and theories for actual application in provision of services to the society and the community. This will involve providing economic solution to the various issues affecting the local and global society.

References

Glendale Community College, (n.d).Scholars Program Contract

glendale community college, (2018).the constitution of the glendale community college scholars program

Environmental economics

Fuller & Stavins (1998), in their article, “how economists see the environment,” argues that numerous misunderstandings are surrounding the environmental economics. These myths have been constructed by people against the economists due to lack of excellent communication between economists and all of the other stakeholders across all disciplines. This article aims to evaluate some of the common misconceptions about how economists perceive the environment. The findings of this article argue that economists do not agree that market solves all of the issues. Indeed, many economists are responsible for analyzing the market failures through some of the methods such as assessing the environmental pollution in which the laissez-faire rule results in inefficiency. Once economists realize that there are market problems their first approach involves making considerations of the viability of the market solutions due to their likelihood of cost-effectiveness. However, use of market-based approach in environmental protection is not a universal remedy. However, it is important to note that economic analysis is essential in determining the distribution of the profits and costs of executing the environmental policy (Fuller & Stavins, 1998). The authors in their study use the cost-benefit analysis method. Similar to what we learned in class, the analysis involves the original compilation of costs of a project along with the benefits and then converts them into monetary terms. This approach helps economists to determine the present value of the future returns as well as expenditures. Conversely, the article claims that economists do not necessarily restrict their analysis directly to this approach, but instead, they use the monetary measurements only when there lacks another useful strategy. The article deduces that there is the need for more significant efforts towards improving communication across the disciplinary borders.

Anderson and Parker, (2013), assert that natural resources and the overall environment are of essence to economists due to their market potential to cause unproductive results. The article aims at assessing the operation costs that lead to under-provision of environmental products as well as excessive utilization of natural resources through determining what hinders innovation to reduce the operating costs. The article findings prove that high operation costs on natural resources result to resources inefficiencies such as pollution, depletion, environmental degradation and overutilization of these resources. As a result, it is evident that markets failures exist and thus there is the need for a solution and most especially one that is driven by government rules. Entrepreneurs are the driving forces behind the evolution of property rights thus causing the transaction costs to reduce while the net benefits of contractors increases as the environmental qualities increases (Anderson and Parker, 2013). As entrepreneurs carry out an environmental accounting, they can account for their contracting services of the environmental assets within the structure of economic activity. Governments are major players in environmental economics as they can obscure the process of lowering the transaction cost through allowing the conflict of interests to establish hindrance to trade exchange. However, the government may also help in the facilitation of environmental entrepreneurship through supporting vigorous ideas of property rights.  In conclusion, the article emphasizes the need for environmental entrepreneurship and increased innovative strategies that reduce the transaction expenses of economic trade. This strategy suggestion is because entrepreneurs are continually involved in identifying new methods of capturing value for environmental resources.

References

Anderson, T. L., & Parker, D. P. (2013). Transaction costs and environmental markets: The role of entrepreneurs. Review of Environmental Economics and Policy, 7(2), 259-275.

Fullerton, D., & Stavins, R. (1998). How economists see the environment. Nature, 395(6701), 433.

Introduction

Government bonds are safe investments because investors because they will be guaranteed to at lead receive the principal back. The bonds are low risks investment because treasuries issuing them have a full backing of the government. The only risks associated with them are Interest Rate and Inflation Risks if the bonds are allowed to mature such risks do not matter. Investment clubs should consider Multinationals bonds if the economy’s performance is expected to be bright, but they present high yields regardless of the risks. There is a need for the members of the investment problem to gain knowledge of the best investment options.

Conclusion

Government bonds denotes a loan extended to the government .Irrespective of the nature of bond market in any period , the bonds’ and bond funds’ timeliness utility are constant in terms of diversification , volatility dampening , income and protection of downside risks.  The last aspect is mostly associated with government bonds because they are regarded as a low risk investment (He, Krishnamurthy& Milbradt, 2016, 519).  When the Brexit referendum was held so as Great Britain would lead the European Union, the British pound was devalued and this led to a brief crippling of the stick markets across the globe, but only one investment vehicle remained strong and unaffected – the U.S Government Bonds.  At a time that there was a 4 percent fall in NASDAQ and 8 percent reduction in Nikkei, the prices of bonds issued by the government increased. This indicated that the government bonds and the related debt provide a safe haven for the group and institutional investors especially when the economy is in turmoil (He, Krishnamurthy& Milbradt, 2016, 520). The environment maintains a high demand and low yields for the bond because of the negative relationship between prices and yields.

 Despite the fiscal happenings of the government in a given period, the long-term bonds issued by the Treasury remain to be completely safe as long as the investor holds them to maturity. This is because they will be guaranteed to at lead receive the principal back.  Before the bonds mature, their prices undergo substantial fluctuation. Hence, investors who are conscious about safety so that it is a priority should be certain that will not need a cash-in of the holdings before the date of bond maturation (Ehrhardt & Brigham, 2016, 167).   This is true especially for the US government bonds. They have been considered to be the most effective investment options for investors who need to safely store value for their money.  What is more important in case of a safe investment is not its absolute safety but that while compared to another investment it is relatively safe (Ehrhardt & Brigham, 2016, 167). This can explain why the US government debts are so specially and thus its bonds.

 In addition, the treasuries have a full backing of the government and therefore, there is almost zero risk for any default on the securities which are considered to have fixed-income.  In fact, since the formation of U.S government in 1776 there is no single time that the Treasury has ever failed in its repayment of its lenders. On the other hand, even the safest bond sold by corporation cannot make such a claim.  When investors buy treasury bonds, they can rest assured that there will be no loss for their money since the principal amount will be issued back with its due interest. However, there are some risks that the investment may face which consist of Interest Rate and Inflation Risks. In case of a rise in inflation, the value of the bond may reduce and if the inflation rate is higher than the interest rates.  Basically, the actual value of the funds invested in the bond will reduce (Van Riet, 2017, 14).  If the Treasury bond is held up to maturity date, the risk of interest rate is not considered a factor. However, if the Treasury bond is sold before it matures, one may not receive back the principal amount used in the payment. But there are safer than any corporate bonds. In fact, the government bonds are so safe that they do not need to offer much payment as a way of attracting investors (Van Riet, 2017, 14).

Bonds issued by Multinational firms are high yield bonds because these companies have credit ratings are considered to be below the investment grades. These firms have massive amount of balance sheets cash due to their big and recurring revenues (Butler, 2016, 5). The multinational firms’ credit ratings are high than that of most governments including the U.S government due to limited possibility of them defaulting or failing to make principal and interest payments at the maturation date. Corporate bonds normally provide some advantages to the investors specifically those who are in need of predictable and stable income(Ehrhardt & Brigham, 2016, 173).  The needs of an investment club depend on their risks that its members are willing to take and their cash flow needs especially in future. If the members want to cash flows that are reasonably reliable and ones that are consistent, the corporate bonds issued by multinational would be a good choice.  The bonds issued by multinationals provide term investment that is moderately secure and the cash flow can be predicted.  Normally, a bond makes it possible the realization of a certain investment since it is transferable in nature.  The return offered by the bonds are somewhat secure and there is a chance that they will be higher than having the money deposited in a bank and even more security of capital than is offered while investing in equities (Butler, 2016, 5). Therefore, they may provide enough savings investment for a club since they will be in need of generating income.

However, there are high risks associated with the high yields of these bonds and which may sound inappropriate for the club.  The major risk can be associated with high volatility of these bonds in comparison with other bond market areas.  While the bonds by Multinational firms have shown good performance over time, they can also fall very quickly especially once the market environment becomes sour (Ehrhardt & Brigham, 2016, 173). Such a risk is shown in the 2008 financial crisis that hit the US market, and the high-yield-bonds lost more than 25% of overall value.  The bonds tend to have the best performance when the economy is undergoing expansion and the investment confidence level is quite high. Hence, the Club members should consider investing in multinational firms with the possible benefits and risks in mind. When the prospects for the economy in future are bright the Club should consider investment, otherwise they should invest in government bonds that are more secure and with almost no risks even though returns are lower.

Conclusion

Government bonds pare the safest investment assets for a Club even though their returns are not high. The Multinational bonds face higher risks and hence greater risks of returns which means and the club should invest in them if they are ready to take the risks and hence, the high returns. There also likely losses since the latter fluctuate a lot in terms of value.

References

Ehrhardt, M.C. and Brigham, E.F., 2016. Corporate finance: A focused approach. Cengage learning. 167- 117

Butler, K.C., 2016. Multinational Finance: Evaluating the Opportunities, Costs, and Risks of Multinational Operations. John Wiley & Sons. 5-13

He, Z., Krishnamurthy, A. and Milbradt, K., 2016. What makes US government bonds safe assets?. American Economic Review, 106(5), pp.519-23.

Van Riet, A., 2017. Addressing the safety trilemma: a safe sovereign asset for the eurozone (No. 35). European Systemic Risk Board. 13-14

Introduction

Economic recession is the persistence decline of the gross domestic product for over two consecutive periods. The National Bureau of Economics Research have describe a recession as a drastically fall in economic activities in nearly half a decade. The United States economy has experienced several downturns to name a few The Great Depressions of the 1930s, the Financial Crises of 2007 among others. There are many factors that characterized each recession and solution of each. Factors such high unemployment rate among citizens, world war, and terrorism among others has dramatically played a major in these recessions. Government debt between The United States and other countries of the world had tremendously increased to up to $63.1 trillion as per International Monetary Fund. This can be traced its roots back to Great Recession. The United States government has an internal debt of $20 trillion. This domestic debt includes what it owes its self. Gross debt fewer government assets calculate the net debt about the deficit. Globally many people view The United States as a global economic powerhouse. In a research conducted by Pew Research center across 38 countries indicate that 42% see The United States as an economic master of the world. Never the less, most European nations considered China as the world industrial giant. These are because of the financial crisis the f 2010s in the U.S economy. But recently the trend had also returned back to where it was. Most countries have returned to their perceptions where they viewed the U.S as an economic powerhouse of world.  The competition between the two countries’ economies namely China and the U.S had some factors like their leader's popularity had contributed to this. The United States has a liberty when it comes to global reputation. We shall focus on economic recession, government debt and economic power respectively in our study.

Economic Recession

                 High level of unemployment is one of the critical factors that have led to The United States economic recession. The research conducted on U.S adult between 2006 and 2016. Sample size collected from the population was 5006 with a level of +/- 1.5% error of estimates, 95% level of confidence while those who are unemployed were a sample size of 3,096 +/-2.0% error of estimates, 95 % level of confidence. About the job security for the next 20 to 30 years, they had the following views: in 2006 more protection was 11%, less security 62%, status quo 24%, and no idea 3%. While in 2016 barely ten years after, more security was 16%, less protection 63%, status quo 19%, and no idea 2% while the sample size was 2520. Those who were employed, in 2006; more security was 11%, less protection 64%, status quo 23%, and no idea 2% while in 2016; more security was 15%, less security 65%, status quo 19%, and no idea 1% the sample size was 1542. The other factor that affected employment level is the benefits derived from such employment, for example, health insurance, allowances and pension’s schemes. 25% find it better, 49% average, 23% status quo and 3% had no idea. On the improvement of their skills, 66% thinks has to be frequently done, 9% less often, 22% status quo and 3% has no idea sample size was 2520. About loyalty to their employers, in 2006; 8% were more loyal, 51% average, 31% remained the same, and 4% had no idea while in 2016; 15% were more loyal, 56% average, 27% remained the same, and 2% had no opinion on the subject. About whether their employers give them adequate training to sharpen their skills, 36% were in agreement, 29% had less instruction, 31% remained the same, and 5% had no idea over the subject. In every data survey an allowance of 5% error of estimates had been given ("State of American Jobs Survey | Pew Research Center").

     Employment was affected by the level of job security both from the unemployed and those who were already at work. Both categories of the people have the same thought about job security concern. This is because they tend to differ with less than 1% +/-. According to the data, more individual has low confidence in job security. This is because the highest number lies at where there is less job security. On the issue of job retirement benefits, pension scheme, allowances such as vocations and health insurances, the data indicated that more citizens had an average view of the problem. There is a more concentration of 49% not as good. These had done from both employed and unemployed combined chart. When asked if they feel that if there is a need for them to improve their skills to that they can keep up with the current developments, in the working environment, most of them think that it would of vital help. However, the number has been declined by 4% over the ten years. Loyalty to their employees might be one of the factors. The report shows that still, the most significant groups are average loyalist toward their employees. Meanwhile their number had been slowly increased with 5% over the 10 years span. That is roughly 0.5% per year which is still minimal. This might have been caused by the perception the group had about job security and thus having a notion that they can be landed jobless at any particulars time. The group holds the point that their employers training are of great help and they should receive more training from them. That way they will nourish their skill to face the obstacles along their career work. The workforce is redundant toward their core mandate and achievement of the intended goals ("State of American Jobs Survey | Pew Research Center").

Government debt around the world

As at 2016, The United States debt stood at a gross of $19.9 trillion. All indebtedness to its states and those it owes to itself is included in the figure. Japan follows with $11.4 trillion while China is the third with $ 5 trillion. According to the treasury department. The debt has been rising from 1996 to 2017. The debt slowly declined from 1996 to 2000 from 63.4% to 55.7%. Between 2000 and 2001 the debt remained static at 55.7%. From 2001 to 2004 the debt shoots upward to 60%. For the next four years, there was a state of reluctant and the debt level remained the same. The deficit took another turn and rapidly went up to as high as 100% in 2014. There was a decline between 2014 and 2016, but it followed by a rise to 103% in 2017. This debt is a combination of all national debts

The Interest payment on debt has been fluctuating time and then. Between 1980 and 2000, the amounts have been so much high at 15 %. But from 2000 to 2017 it falls to 6.8%. The interest accrued was estimated to around $276.2 billion by the end of 2017. The government budget to pay $475.5 billion investment within the same year. Another arm owed 27.6% of the debt. That brings about $5.48 trillion. The social security’s funds have around 14.7% of the total debt. The Federal Reserve has a share of 12.4% of the total debt..

                The government is paying historically low rates on its debt. Public debt had interest rates of 2.232% and 2.279%. Therefore, securities have lower risks compared with other nations ("5 Facts about the National Debt").

    This whole data brings about the question on to whether the U.S has the most government debt in the world. It is evidently shown by the graphs well. There was $25million unused debt capacity. This is an unproductive debt which still attracts interest and therefore increasing the amount to the core principal. The national debt has superseded the gross domestic product. This was the catalyst for the financial crisis of 2007. This has not happened for so long since toward the end of World War 2. The United States security has been held up widely since biggest creditors, social security funds and Federal Reserve System have the most significant shares of the debt owed by the government.   This means that nearly quarter of the debt owed is with other arms of government. And since each state has its debt structure and repayment plans, then the central government find it hard to consolidate and restructure the repayment schedule for the debt. There is a decline in debt interest payment toward the end of 2017. This is as a result of interest credited by social security. After Great Recession, the government was determined to lower the rates, and this has led to it be paying lower historical low rates. This has made the debt to remain significant. China being the second in debt, owes only 5.8% of The United States debt about $1.15 trillion and $202.6 billion. That is less than an eight of the total debt owned. Japan, on the other hand, owes $1.1 trillion. Therefore the government has to increase more an effort restructuring its debt so that it can make repayment schedule in advance. This will make the government more efficient when it comes to allocating and financing its project that will, in turn, make repayment more efficient.

Worldwide, many name U.S. than China as World’s leading economic power           

U.S is viewed as second world economic power after China. Research conducted shows that Canada, Spain, United Kingdom, France, Germany, Sweden, Netherlands, Poland, Hungary, Russia, Lebanon, Jordan and Australia view China as the most world leading economy. Alaska, Mexico, Peru, Brazil, Argentina, Chile, Colombia, Venezuela, Turkey, India, Tanzania, Vietnam, Greece, South Korea, Kenya, South Africa, Ghana, Nigeria, Senegal, Japan, Israel, Indonesia and Philippines view The United States as the economic powerhouse. This represents 74% of the total countries of the world. The pro U.S believes that the Americans made their country and therefore they are entitled to their effort unlike China. They believe that it is through hard work that the American has made it to the top. Most of European countries rallied behind China. But Italy gives both nations a draw as they tied on the rank. This is as a result of many factors such as debt level of both nations, relationship between the two countries with other countries of the world. There are also other countries that were undecided over statistics. Such countries are Green land, New Zealand, Saudi Arabia, Nepal, Mongolia among others. Most of African countries did not vote any side because they were torn between the two countries economy. This is because in the recent past, China had invested heavily on African soil. From structures to technology, therefore it seems that they have dwelled so much to even invest externally. The United States on the other hand have been investing too on African soil. In fact, it had been the leading investor to the African continent. Therefore these twists hold the perception of who is the biggest economy at bay among the Africans. The other factors that have influenced this perception are the ideology of capitalism and communism. Most countries follow their masters when it comes to these. This is due to the relationship that coexists between the two ("Globally, More Name U.S. than China as World's Leading Economic Power").

    From the above, we can deduct a conclusion that both China and The United States has economic muscles. Each country has its most active supporter which they have interacted in one way or another. There are others who are yet not decided to which is the leading economic powerhouse. Despite China having invested in technology, structure, and regulated debt, U.S still leads in this race. This is because the ideology of capitalism which the Americans came up with had enabled them to prosper much far for a long time. On the other hand, China is still a communist nation, and this had made it slug economically. The population is another critical factor. China is the most populated nation in the world. This accompanied many problems associated with the mass. Most of the revenue generated by this nation is used to cater for the citizens. The U.S on the other side has a small population but create a lot of income. These revenues are used to foster economy up. The other factor is that U.S comprises of many ethnic communities from all over the world, in fact nearly all U.S citizens are people who migrated there. These have solidified by the National Lottery that offers new entrant to the country. This person brings in new ideas and development to the state. They enrich the economy. On the other side, from history, China has not allowed more visitors to their country. Therefore they have remained with their ideas, and this makes their economy to lag behind. The involvement of U.S in many wars is one of the bottlenecks that the economy of this country faces. More funds are invested in this field. This fund makes the debt to be so much huge and thus makes the economy sluggish.

References

"5 Facts About Government Debt Around the World." Pew Research Center, 19 Sept. 2017, www.pewresearch.org/fact-tank/2017/09/19/5-facts-about-government-debt-around-the-world/.

"5 Facts About the National Debt." Pew Research Center, 17 Aug. 2017, www.pewresearch.org/fact-tank/2017/08/17/5-facts-about-the-national-debt-what-you-should-know/.

"Global Public Downbeat About Economy." Pew Research Center's Global Attitudes Project, 9 Sept. 2014, www.pewglobal.org/2014/09/09/global-public-downbeat-about-economy/.

"Globally, More Name U.S. Than China As World's Leading Economic Power." Pew Research Center's Global Attitudes Project, 13 July 2017, www.pewglobal.org/2017/07/13/more-name-u-s-than-china-as-worlds-leading-economic-power/.

"State of American Jobs Survey | Pew Research Center." Social & Demographic Trends - Pew Research Center, www.pewsocialtrends.org/dataset/state-of-american-jobs-survey/.

"U.S. Image Suffers As Publics Around World Question Trump's Leadership." Pew Research Center's Global Attitudes Project, 26 June 2017, www.pewglobal.org/2017/06/26/u-s-image-suffers-as-publics-around-world-question-trumps-leadership/.

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An assessment report on Toy’s Economic and Legal Issues in Japan.

Introduction

Japan is one of the largest economies in the world. In 2014, Japan economy was ranked third largest in the world. Toys are one of the products that Japan export. Usually, toys are, produced in units, batches and tailored made to fit customer’s preference. Economic and legal issues bind toys. Some of the legal issues involve laws enacted, rules and regulation that prohibit toys manufacturers from some areas and allows the same. Just like other manufactured products, toys are also regulated by various laws in Japan. Such requirements include food sanitation law, safety, and precaution laws. Toys must also pass compliance test conducted in laboratories. Toys must pass a safety test, flammability tests, safety and risk assessment tests, electrical safety tests, chemical test, and mechanical tests. Toy industry falls under the ministry of economy, trade, and commerce. The department approves associations and unions that had been formed by the toys companies. They include Japan safety toy mark programme, Japan toy association among others. Toys are also subject to international rules such as International Electrotechnical Commission, International Telecommunication Union, Federal Communication Commission, et al. There even economic issues that affect toys production industry in Japan. The country is an all time running economy, this means that the industry operates at all time. Production rate is too high making more significant margins. But also this is also a problem since people tend to overwork within the producing units. Another is that Japanese toys experiences high level of competition from other big producers like China, this makes the China a monopolist in the market. Due to its more significant share of the market, it can control prices thus making Japan suffer in external markets. Our research paper is based on these economic and legal factors that have affected toys production in Japan.

    There are legal factors that regulate toys production in Japan. They are both internally and externally enacted laws, rules and regulation. Japan legal system passes internal instituted statutes but implemented by the ministry of economy, trade, and industry. One of the requirements in Japan food sanitation act (Matsuura, 1998, p. 45). This act focuses on those toys which belong to younger children of six years of age and below. It also includes definitions of material contacts and articles specifications. This act is divided into several categories namely; category one which regulates those toys which come into direct contact with the mouth of the kid. Specific measures must be taken into note when producing those toys. For example, they should not have sharp projections in order not to pierce the tongue of the child. They also include pacifiers. The second categories are those toys that have potentials to come into contact with the mouth of the child. Such toys are clay dolls, housekeeping toys, and balloons. The last category is the accessories that are related to those toys of grade one and two respectively. It states that for a toy production to be complete, it must have passed the compliant test and tested thoroughly. This act of rules is regulated by the Ministry of Health, Labour and Welfare and the approved toys testing laboratory. Toys are also subjected to safety toy standard that is controlled by Japan Toys Association (Suzuki, 1996, p. 52). They are mainly toys for children of fourteen years of age. It consists of three categories. First is a mechanical and physical property which deals with an outlook for the toy. They give directives of how such toys are manufactured. They include electrical safety testing which controls test to radio controlled, battery, electric, heat and fire resistance toys. According to this law, all toys should not have sharp edges and points. The second category is flammability which regulates volatility of toys. Toys should be manufactured using low volatile materials to protect the kids from fire hazard. The last parts are chemicals which are restricted in making the materials which are used in production. Such compounds are mercury, chromium, cadmium, lead et al. that is harmful to human (Tobin, 1998, p. 62). It is because children have the tendency of sucking, swallowing and chewing their toys and thus may consume such metal elements creating complication to their health. There are also other regulations that govern not only toy industry but also other industries. Such laws are compatibility and waste disposal, restriction of hazardous items, battery waste and disposal requirements especially for those remotes, food Imitation requirement and last but not the least is cosmetics rules.  All these rules are applied to different levels of toys production. They are assigned to experienced managers who ensure every law and regulation adhere to (Ellington, 2009, p. 47).

    Apart from legal issues, toys production in Japan faces economic benefits and challenges respectively. Japan economy has a large population that provides a large workforce. This population consist of skilled and unskilled though little, workforce. The toy industry capitalizes on this workforce to produce quality toys on the market. This gives them high consumer satisfaction rate thus raising their margin. There are also new innovations of toys since the involved makers are elite (Araki, 2002, p. 21). The economy runs day and night making Japan an all-time economy. This has some detriments such as health issues due to long working hours that cause physiological mental problems to the workers (Araki, 2002, p. 32). The other economic issue that affects toy industry is the high level of competition within and overseas markets. China is the largest exporter of toys to outside market. This is because it had acquired rights for toy companies from other nations. This makes it to have mass production and thus control market. These make China somehow monopoly and thus control prices of those products in the markets. This makes Japan toy industries to suffer from low sales volumes. China also seems to disobey agreed market laws with international communities (Dato, 1988, p. 12). Japan also suffers from natural catastrophes such as earthquakes that frequently happen since its location is along the tectonic fault line. This earthquakes destroys toys factories making it difficult to run business. A lot of resources are used to repair the factories. Therefore, there is a sluggish toward achievement of the industry goals. Another economic issue that affect this industry is the fact that Japan is a scattered Island country and therefore costs such as transportation expenses incurred are too high. It is because some toys components manufactured are different companies located in the different region. Workers also have to travel from different regions; therefore companies in this industry have to cater this cost (Araki, 2002, p. 102). This makes their margin to be less. Japan also lacks some resources and therefore had to import them through outsourcing from outside country. This also increases cost of production for the toys. Japan taxation system had favoured toy industry. It is because consumption tax on imported raw materials and manufactured goods is made to as low as eight per cent being a final tax (Matsuura, 1998, p. 58). This encourages even potential investors in this industry. Japan government has also invested more in ensuring that conducive environment for this industry had been created. This is by allowing less regulation requirements of opening toy shops and accessibility of internet. This enables more customers to have availability of toys product through these systems. A research by European Union-Japan Centre for Industrial Cooperation shows that sales of toys through specialized chain toy shop still have the biggest share in the market. It is closely followed by online shops. Toys from outside Japan have also a stake in the country market. China is the biggest importer of toys in Japan economy. They are regarded as inexpensive compared with locally made toys. The recent low birth-rate in Japan has also affected this industry negatively. This is because there is a decline in sales volume of the product.  Japan also exports their toys to overseas countries. Some of the biggest overseas markets are country like Germany, United Kingdom, Hong Kong, United States Taiwan and South Korea. Exports to United States are subjected to WTO tariffs and taxes. This is causes laxity to the amount of toys exported to the American market. There are programmes that the government has introduced to nurture talent. These provide the companies with best-skilled workforce (Amaya, 1988, p. 42)

    We can conclude that toy industry have both pros and cons during operations. The benefits in this industry are that Japan government has put more effort in helping and protecting local toy industry. This is through provision of amenities that creates conducive environment. This ensures that investors in this industry are encouraged and well protected. Amenities such as good internet system have made this industries make their sales increment to be more. This is because the market share had been expanded even to other countries. Customers can buy for toys on online. The government reduction consumption tax to as low as eight per cent is also a plus to this industry. Both local and international investors have availed their interest on this industry. They can evaluate the viability of their investment. The government has also extended their hospitality to this industry by making this tax to a final tax levied to product from this industry. Japan government has also ensured that there is a favourable competition within the market. This is done by limiting and regulating toys imported from other countries into Japan economy. Improvement of infrastructure like transportation system by the government of Japan is also a plus. Transportation being one of the hindrances that affect this industry has been given attention. The government has constructed roads, railway lines and airports. This makes movement of factors of production such as human resource, capital et al more mobile. There is also introduction of innovative hubs that nurtures talents from its citizen. This provides the industry with most perfect toys production that caters all the needs of its users. Due to population decline, the market share has been declining. Therefore the industry must come up with new strategy that will cater such obstacles. The industry must also support their unions so as their plight and grievances can be heard by the government and the international communities as whole.

Reference

Amaya, N. (1988). The Japanese economy in transition. Japan and the World Economy, 1(1), 101-111. doi:10.1016/0922-1425(88)90008-4

Araki, T. (2002). Labor and employment law in Japan. Tōkyō: Nihon Rōdō Kenkyū Kikō.

Dato, R. (1988). Japan and the world economy. Japan and the World Economy, 1(1), 1-2. doi:10.1016/0922-1425(88)90002-3

Ellington, L. (2009). Japan. Santa Barbara, CA: ABC-CLIO.

Matsuura, I. (1998). World economy and financial markets. Japan and the World Economy, 10(3), 387-390. doi:10.1016/s0922-1425(98)00040-1

Suzuki, Y. (1996). The main issues facing Japan's economy. Japan and the World Economy, 8(3), 353-360. doi:10.1016/0922-1425(96)00014-x

Tobin, J. (1998). World economy and financial markets. Japan and the World Economy, 10(3), 377-379. doi:10.1016/s0922-1425(98)00038-3

The Remittance Industry In Saudi Arabia

To increase a CAGR of 15% from 53bn USD at the final stages of 2010, the remittance men in the GCC section jointly submitted 105bn USD in the year 2015. Some countries including the Kuwait, Saudi and UAE have formed further than 80% of the outflow between 2010 and 2015. Amid the GCC, Saudi Arabia leads with an outward remittance. This makes Saudi Arabia to be always graded second internationally after the USA.  There has been a remarkable increase in demand for overseas labor in 2010-2013 due to the tough oil prices as well as animated fiscal measures in Saudi Arabia. Remittance from Saudi Arabia has grown at a 14% CAGR in between 2010 and 2013. This growth has however seen a significant development of remittance that has subdued to a CAGR of 3% from 2013-2015.

Outward remittances, as well as remittance population, are directly affected by oil prices and capital investment. For instance, increase in oil prices has witnessed increased investments which have as a result led to expatriate population congregating to Saudi Arabia to cater for the need of labor markets. Increase in the expatriate workforce has resulted in increased remittance outflow in Saudi Arabia.

 The period of 2005-2014 has seen an increase in oil prices of Avg 83.6 USD as weighed against earlier years which observed about Avg 22.61 USD which has accordingly generated a noteworthy increase in capital investments. When compared to the year 1994 that saw a 36.3bn USD, the average capital investment in 2005-2014 was 161bn USD, signifying the considerable difference. Exhaustive manual work is required for the significant increase in expenditures channelized for capital investments. The impacts of the expatriate labor force were a double growth from 3.5mn non-Saudi male expatriates at the final stages of the year 1994 to 6.9mn at the final stages of 2015. Consequently, there was an increase in remittance outflow. Accordingly, the annual remittance grew to approximately 2.6 times in 2005-2015 as that of the year 1994 to 2004.

Table 1 demonstrates the workflow remittance outflow of workers, the rate of growth and government expenses in Saudi Arabia as a proportion of GDP for the time in 1970-2010.

Years    GDP growth rate    Remittance outflow    Government expenditure

The table is in the form of oil price, investments, and remittance

The decline in oil prices in Saudi Arabia has directly affected its financial system. From a GDP of 3.5% in the year 2015, it was expected that the GDP would get to 1.2% in 2016. The most recent forecast was that deficits would be approximately 9% and 14% GDP for the year 2016. Saudi witnessed a fiscal deficit of USD 97.9 bn in the year 2015 and USD 83bn for the year 2016. Saudi Arabia has learned a lesson to manage shortages since the mid-2014 decline in oil prices. However, there have been hitches given that the banks have been investing in government debts thus the government has been increasing deposits withdrawal and credit available by banks to assist other sections of the financial system like businesses and retails. The reduction of liquidity, as well as rise in interests rates in interbank’s which has exerted pressure on tribute development, has impacted the growth of the free enterprise.

Saudi Arabia has been compelled to reduce the investment expenses by nearly two thirds as its struggles with the oil price overthrow. Projects aimed at fund allocation have failed in the year 2016. For instance, the Riyadh Metro along with Jeddah’s King Abdulaziz international airport has seen a significant reduction from the year 20165 to 2016. Research indicates that transportation and infrastructure expenses are likely to decline by 63% in the year 2018 as the kingdom partnership capital expenses with the aim of lessening the deficit. To sustain the budget deficit, Saudi Arabia is using around 9bn USD on a monthly basis for its foreign reserves. This expenditure is approximately 1.5 times the expenditure on the 2008-2009 budget deficits. Impacts of using foreign reserves include limiting the country’s public expenses. Consequently, Saudi Arabia is reviewing lots of projects and considering plans to cancel others to cut ministry budgets by Qatar and secure compressed finances. Cancellation of projects would have adverse outcomes to the economy of the country. For instance, the construction sector would be negatively impacted by the cancelation of the plans.

Saudi Arabia has considered the most competitive market all over the world gave that it is the second highest remitter following the United States. On the other hand, there are factors that impact the market other than oil price and investments. The elements can be divided into lots of categories including general factors found in all remittance markets like socio-cultural, economic, technological, gender and internal factors. These factors directly impact the remittance market in the country such as 2030 vision, VAT, and Nitqat points agendas.

General Factors

Social, Cultural Determinants of Remittance

The population of Saudi Arabia is 33.41 million, with 12.64 minimum which is about 37.84% being foreigners. The country has eight nationalities represented approximately 85% of immigrants. The top five nationalities fall in order of 19.4% being Indians, 14.5% being Bakestan, 14.4% being Bangladesh,14.3% being Egyptians and 11.3% being filipin. Typical characteristics of nationalities include high population and extensive poverty.  The presence of immigrants in Saudi Arabia makes it receive some money to help them and their families. Of the nationalities, the eastern community is regarded as one among those who value the family relationship urging emigrants to transfer money in a more continuous pattern. This idea contrasts the idea of some immigrants who believe in individualism and making self-improvement a priority this spending more than they dispatch.

Gender and Age Determination Of Remittance

Other than economic factors, gender plays a significant role in the remittance flow. For instance, at the final stages of the 90’s, female represented more than 45% of the total migrants. Females are currently traveling independently, and the pattern of migration is significantly changing. Research indicates that the women who worked in Saudi Arabia at the final stages of the year 2017 were approximately 3.98 million, representing about 31.8% of total foreigners. Affluent families in Saudi Arabia are bringing in caregivers from needy families and countries taking advantage of low-cost salaries for them. Despite the fact that female migration generates less income as compared to that of the males, studies reveal that females appear to save higher portions of their profits than men. According to Tacoli (1999), women dedications and obligations among Filipino labor migrants are powerful as compared to their male counterparts. On the other hand, it might be an excellent opportunity for Filipino immigrants to practice self-interest goals as a result of spatial detachment and increased monetary reliance while simultaneously maintaining a functional role as a result of normative gender roles.

Figure 2 shows Filipino as one of the top three Remittance-Receiving Countries, 2014

The figure below demonstrates top Remittance corridor as of 2015. From the top list, it is clear that 3.3bln remittance come to Filipino from Saudi Arabia.

Remittances and Migrant Associations

The role of migrant associations is comparatively understudied.  Hometown associations as a class of migrant associations have received some attention from a particular region or town in their motherland. One of the tahweel alrajhi branches observed a dramatic decrease in the remittance capacity for approximately six months and lasted for ahead of 4 months.  The department is located in a Khobar city, a downtown with most of its occupants being aliens from the Philippines. Several Filipino employees worked at the branch but shifted as a result of regulations indicating to move employees between all departments in a continuous manner. The ordinance aimed to change all Filipinos operating from there to other branches and bring employees from different cultures. According to the branch manager(Abdullah Al-abbey), the regulation impacts the remittance capacity in the subsection negatively for several months following extended periods of negotiations with top managers to bring back the employees and add more top Filipino employees to strengthen the remittance operations in the subsection. The reinforcement was a very vital decision and the branch record excellent account of the remittance volume.

Internal Factors

Nitaqat Program (Saudization)

A Nitaqat program with the aim of increasing job opportunities has been established by the Ministry of Labor of the kingdom of Saudi Arabia in the free enterprise. The government's direct involvement is aimed at obtaining quick outcomes and giving Saudi nationals an enhanced stand in the neighboring jobs market, which is presently subject to foreign workers holding 6.5 million which is about 90% of the jobs.

The table below demonstrates the nationalization quotas for a variety of firm sizes in the Building materials and construction sector this presenting a snapshot of the Nitaqat system.

Presently, foreign workers represent further than 8.4 million which is a 31% of the population of the empire. The workers dominate the free enterprise labor force by having about 90%S of jobs. Conversely, those who represent 18.7 million which is about 70% account for the remaining proportion of employment.

The rate of joblessness for Saudi Arabia nationals were 10.5% and 0.3% respectively as of the year 2009.s

Saudi 2030 Vision

The most critical goal Saudi is to recover the economy by finding alternatives to oil, income diversification, Fight Corruption and lessen financial waste as well as external expenses. The vision is enclosed by substantial regulations to strengthen and put into practice the critical objectives in the image. Among the provisions is the application to lessen the outflow remittance and improve internal investment and expenses to manage a limit for the employee money distribution.

Value-Added Tax

The general authority of zakat and tax articulates that the VAT will not apply to the remittance amount though it will be taken from the rigid tax amount as 5%. The charge is not expected to affect the remittance volume to a great extent but to, on the contrary, affect the remittance trends more.  As a result of an accord by the members of the g20 Saudi Arabia trying to maintain the average expense below the global average of 7.45%, the average cost of conveying remittances from Saudi Arabia is 5.20%.

Works cited

Impact of low oil price on Saudi Remittance industry. (2017). e-marmore.com [Blog] A

subsidiary of 'Markaz'. Available at: https://www.e-marmore.com/Blog/Infrastructure/February-2017/Impact-of-low-oil-price-on-Saudi-Remittance

Tacoli, C. (1999). International Migration and the Restructuring of Gender Asymmetries:

Continuity and Change among Filipino Labor Migrants in Rome. [ebook] International Migration ReviewVol. 33, No. 3, pp.658-682. Available at: ( http://www.jstor.org/stable/2547530?seq=1#page_scan_tab_contents) 

Introduction

The pace and pattern of past economic growth can be attributed to inventions that focused on human needs and seems to have been a one-time event.  The changes in population and level of income affect the living standards and the consumption of products in the market and together with increased productivity; they lead to high economic growth. The decline in economic growth can be attributed to inventions that do not focus on basic needs. Hence, in the long-run, economic growth will be determined how inventions change productivity and satisfaction of market needs.

The major cause for the pattern and pace of economic growth can largely be attributed to the one-time event that involved great inventions mostly in the later 19th century, followed by enhancement and exploitation of the inventions. This process took time and its impact on economic growth was at its peak in 1920-1970 periods. All the other changes including information technology have resulted from that wave of inventions and which may not be experienced again in future. These inventions can be greatly be related to the Pre-world War II period, where the major technological, political, economic and social changes contributed to the pattern of economic growth experienced (Gordon, 2017). The major underlying principle of inventions can be explored through the various innovations differentiated among industrial revolutions.  The political changes relate to various policies adopted by the governments that paved way for unionization of workers, regulations of economies and protection of domestic economy from international competition.  The industrial revolutions had a great impact on the farming, processing and manufacturing sectors, and basically, life improved in the 1870-1940 period in ways that hasn't been experienced since. There was a general improvement in the standards of living as households incomes especially in the urban center largely increased. While prior to 1935 the pattern of population shows a decline, the post 1935 period, after the great depression shows a rise in population between 1935 to around 1950 (Gordon, 2017) This can be attributed to increased income in households as more people lived better lives and were able to bear and raise more children. However, the pattern in economic and population growth indicates a successful decline since then, which shows that the major inventions were more likely a one-time event.

The growth in the economy does not occur in a steady process but economic advance occurs in a rapid manner in some instances than others.  This is because some inventions have more weight than others in terms of leading economic growth. For instance, the period of revolution after Civil War can largely be attributed to the Great Inventions (Gordon, 2017). In addition, the growth of American economy has been impressive and disappointing at the same time since 1970, and this can be attributed to the fact that economic enhancements have appeared to be directed towards a narrow field of human activities that relate to communications, entertainment, and information gathering and processing (Gordon, 2017). The other measures of speed of technology and innovation progress that make up overall factor production including food, shelter, clothing, working conditions and health have slowed down in terms of growth. The focus on the inventions that do not meet the basic human needs since 1970 can explain the slow economic growth since that period.

The irregularity in the productivity in the economy is directly related to the living standards in the country and the productivity aspects can explain the erratic growth in the economy in relations to various aspects of life. During the middle period – 1920 to 1970- the output per person growth was higher than the previous period and later period (Gordon, 2017). The more productivity growth than per-person output during the middle period in comparison to former and latter periods is an indication of a sharp decrease in hours worked for each person. The political influence of productivity is seen in the various policies such as the legislation of New Deal that reduced working hours and empowered the labor unions. In addition, productivity growth led to increased income but people were spending less on goods and services and focusing on leisure activities (Gordon, 2017). When the living standards were low, the inventions had a great impact on productivity and consumptions of goods and services but after improvements, the new inventions are no longer having great impacts. For over last one and half decades, for instance, computers being used in offices are the same, retail outlets still have human employees and the introduction of electronic medical records had little change on roles of doctors and nurses. This means that when inventions coming after improved living standards have little effect on economic growth.

In the long-run, the economic growth's speed and a pattern are determined by inventions and aspects that are likely to influence the satisfaction of the basic human needs including food, shelter, and clothing.  With increasing human population, the need for basic needs will be more pressing as competition in the utilization of few resources increase. The inventions that would enable settlement in inhabitable areas or cultivation in dry areas, for instance, are likely to sustain long-term economic growth (Gordon, 2017). The increased social pressure for such needs is likely to sustain economic growth as new inventions are introduced in the market. The pattern and pace of economic change and development will be determined by the level of human needs.

Reference

Gordon, R. J. (2017). The rise and fall of American growth: The US standard of living since the civil war. Princeton University Press.

Chapter 9 discussion macroeconomics

Consumer Price Index measures used to estimate the changes in prices of basket of goods or services, which represents the consumption in a given economy over a given period of time (Mankiw, 2009).  The general inflation rate for the past 12 months increased to 2.1 percent, which is also, represents the Consumer Price items index (Bureau of Labor Statistics, 2018).

The Consumer Price Index over the past 10 years has ranged between -0.1 and 3.5, which indicates a considerable shift in inflation over the same period.  The items index was 3.4 percent in 2008, and this drastically reduced in 2009 to -0.1 percent. The index rose for the next 2 years from -0.1 % in 2009, to 1.2% in 2010 and reached a high of 3.5 % in 2011.  The price index then decreased consistently to 1.8 % and 1.4 % in 2012 and 2013 respectively, and then slightly rose to 1.5 % in 2014.  After decreasing to 0.3 % in 2015, the index increased to 1.5 % and 2.1 % in 2016 and 2017 respectively (Bureau of Labor Statistics, 2018).

The Consumer Price Index is more relevant because to public economic situations because it is based on goods and services bought by the households.  It is important because it highlights the general shift in products and services prices in a systematic manner. It can show the trend in economy in ways relevant to the consumer purchase behavior. My personal inflation rate may vary from the average rate represented by Consumer Prices Index if the changes in prices of the products I consumer are different from changes in prices of other products. A rapid increase in the rate of inflation means that prices of goods and services will rise while the income level has not increased proportionately, and thus increasing the cost of living (Mankiw, 2009).  The rapid rise if inflation would help me as a debtor since the price or value the debt is reduced. Presently, inflation has remained at a sustainable and constant level and this does not present a big concern for policy markers.

References

Mankiw, N. G. (2009). Principles of macroeconomics. 232

Bureau of Labor Statistics ,(2018).CPI-All Urban Consumers (Current Series). Retrieved from: https://data.bls.gov/timeseries/CUUR0000SA0?output_view=pct_12mths

ECONOMIC CASE STUDY

Apply economic models to assess market/firm-specific dynamics and how they affect:
1. Firm demand and demand generating strategies

Demand generating strategies are mainly aimed at driving awareness as well as initiating consumer relationships across all routes in the buyer’s journey. An excellent demand generation, thus, ends up creating high quality leads who will engage with the firm’s brand hence turning it into revenue. An example of this entails gaining traction involves focusing it’s offering as well as tailoring messages to modern fashion trends. For instance, the company has managed to highlight bomber jackets as compared to seasonal designs.  Similarly, Coachella music festival and back to school are other event that the company takes into consideration. Lastly, a wide range of the designs are mainly focused on modern weather trends unlike seasonal clothes. This then gives online retailers to have competitive advantages over the high-street retailers who are always forced to keep their online stores completely stocked. This in return increases the demand for their designs hence making the firm to enjoy high profit margins (Wang et al., 2006).

Conversely, the company was able to batch its products in small quantities for a wide selection for trial. Next, there was the need of ramping up of the brand which sold more. In so doing, it means that the firm had the capacity of allowing online retailers to experience a steady flow of products on its website. The advantage of this is that it was easy for the company to react more quickly to changing fashion tastes and preferences as compared to high-street rivals. With this strategy, it means that the firm will be in the position of increasing its customer base both in the short-run and long-run (Harrigan, 2003).
2. Firm price and quantity

Whenever its constant designs keeps on changing as well as experiencing low prices, the firm has the opportunity of setting its own prices. The reason for setting their own prices is because the management authorities of the firm are not mandated to follow the lead of their rivals in the industry. The end result will entail deciding its profit maximizing level (Trebilcock, 2003).

Nevertheless, the company ensures that a design takes two weeks to sell from the time of inception as compared to the normal routine their industry which is six weeks so as to minimize financial losses it could had incurred because of poor sells.  Likewise, this keeps on giving its designs the ‘newness’ that is always desired by youngsters. Combine with this; it implies that customers are given the capacity of enjoying its goods at the right time and place without delays (Mankiw, 2007).

3. Consumer/employee welfare and market efficiency

One of the most crucial of product marketing entails matching the firm’s contents with the customers’ readiness to buy, prospect’s personal pain points, content/brand preference, and so on. For example, the firm makes use of various social media platforms as its main marketing strategy, that is, for informing, reminding, and persuading customers to stick to their designs. As a result of that, the firm was able to reduce the amount it spends on marketing to about 50%. Furthermore, the need for embarking in mining as well as analyzing customer information was to make it adapt more quickly to changing fashion trends and customer demands or tastes and preferences.

In order to improve customer and/or employee welfare, the firm has various plans underway. The first one entails expanding its products and specialty niche lines, including items in petite, tall, and plus sizes that provide alternative pricing tactics. Secondly, the firm has also done extra infrastructure and capital investment. For example, the firm invested more cash in expanding warehouse and office spaces which will boost its growth in the near future. This makes them to be content with their working environment hence enabling the firm to achieve its intrinsic and extrinsic values (Harrison & Wicks, 2008).

Lastly, company acquisition is another good strategy for enhancing its market efficiency. For instance, the company has plans of acquiring PrettyLittleThing. This is one of the online fashion retailers with over a million active clients in newer markets. Nasty Gal was acquired by Boohoo is also one of the first fashion start-ups to have managed building devoted customers following their adverts in various social media. As much as this makes the firm to gain more customers and popularize itself online, it will have the potential of enjoying the economies of scale (Feldman et al., 2008).

Reference

Feldman, M. P., Santangelo, G. D., European International Business Association., & Dawsonera. (2008). New perspectives in international business research. Bingley: JAI Press.

Harrigan, K. R. (2003). Declining demand, divestiture, and corporate strategy. Washington, D.C: Beard Books.

Harrison, J. S., & Wicks, A. C. (2008). Managing for Stakeholders: Survival, Reputation, and Success.

Mankiw, N. G. (2007). Principles of microeconomics. Mason, Ohio: Thomson/South-Western.

Trebilcock, M. J. (2003). The law and economics of Canadian competition policy. Toronto: University of Toronto Press.

Wang, K., Fang, M., Kovacs, G. L., & Wozny, M. (2006). Knowledge Enterprise: Intelligent Strategies in Product Design, Manufacturing, and Management: Proceedings of PROLAMAT 2006, IFIP TC5 International Conference, June 15–17, 2006, Shanghai, China.

Budget Planning and Control

Budgeting is an essential component of any business operation it helps in controlling the involved expenses while enhancing the generated revenue (Reider, 2008). Budgeting is essential in ensuring that the general ability of the business fully meets the set objectives in the financial context (Reider, 2008). For the Babycakes bakery, an accurate budget is highly favorable when compared to operating without the guidance of any budget. The budget mainly needs to highlight the bakery requirements for running the business as well as the involved costs. Having a budget is therefore advantageous given that it permits the business to make advance arrangements that highlight the general cost that is needed for cake preparations. The essence of budgeting for the bakery is that the major resources that are allocated to certain needs cannot be diverted. Since the business is involved in the baking of cakes for a different occasion, this means that it can be able to account for all the needed materials ranging from sugar, flour and so on. In addition, a budget can enable the management to trace how different products are being used. Business operation in the absence of budgets makes it rather challenging to track the spending of the business (Reider, 2008). Financial reconciliation is even harder since the revenue accounted over a certain spending cannot be identified.

A Sales Budget for the LA Babycakes for the 4^th Quarter

This budget was created based on the assumption that the sales will be increasing yearly given that as it operates the demand increases. In addition, the last quarter is associated with the highest number of events and festive seasons which implies that the demand for cakes will increase.

For the 4th quarter, three different products that fit the needs of the holidays during the period will be added. To begin in October during the Halloween holiday orange cream candies and cupcakes will be implemented to fit the needs of the customers during that period. For the Thanksgiving holiday potatoes cupcake with fruity flavors will be available and for the biggest charismas, holiday splendid candy juicy cupcakes will be available. The sales units for the three months are 23000, 23500 and 24,000 respectively.  It is assumed that the sales will mainly be about 700 units each being 3 dollars while for the charismas holiday the sales might be up to 1500. This budget will be useful in maintaining stable and smooth operations.

Flexible Budget versus the Static Budget

In the development of a working budgetary plan, infrequent budgets are more favorable when compared to the static ones (Cokins, 2013). This is because of the flexible budgets usually helpful in the generation of reliable estimations. Since the owner of Babycakes has made the decision of using the flexible budgets this option is favorable for the operation since for the business the materials that are utilized for every order varies. Unlike the static, a flexible budget is easy to apply given that it does not need previous records any mathematical skills to create a balance. This, therefore, shows that flexible budget is an appropriate choice for the company since the owner will not have to worry about the variances.

Financial Challenge

Excessiveness is not a new challenge in the business world. Excessive spending can mainly be generated from the general costs of materials that exceed the general sales (Cokins, 2013). If the materials are offered at higher rates while the business offers rather a low pricing this, therefore, implies that it will definitely experience a loss. In addition, overspending is caused by the lack of plans which means that the business operates based on its capacity rather than on the appropriate spending. This might result in the purchase of unneeded commodities in general or excessive materials that exceed the needs of the company (Vanderbeck, 2013). These products later become wastes and this is a major loss for the business. For example, if Erin purchases more ingredients than the actual amounts needed for baking this will result in overspending.  Such issues can best be resolved by working under a well-designed budgetary plan and sourcing for suppliers that provide the inputs at the least cost in order to ensure that the spending decreases.

Having a plan means that accurate records regarding the sales and purchasing costs are set. This will work to ensure that the pricing by the company is not low. In addition, the plan acts as a control tool that highlights the spending limits in general (Vanderbeck, 2013). This will also play part in ensuring that the needed amount of ingredients are used thus reducing wastes. By having a reliable supply system Babycakes can control the purchasing expenses in general thus resulting in reduced expenses. This is because the objective of any business is to ensure that its revenue is above the incurred cost since it will be creating profits rather than losses.

References

Cokins, G. (2013). Strategic business management: From planning to performance. New York: American Institute of Certified Public Accountants (AICPA.

Reider, R. (2008). Effective operations and controls for the small privately held business. Hoboken, N.J: John Wiley & Sons.

Vanderbeck, E. J. (2013). Principles of cost accounting. Mason, OH: South-Western, Cengage Learning.

ECONOMICS

Wegmans Grocery Store is the main market where I work as one of their employees. In this market, we mainly sell food. As much as it is a bulk retail store for foods, the owner ensures that he has outsourced workers that have a variety of skills. Similarly, the owner ensures that he had stocked highly demanded products, keeping track of all inventories, and so on. This is what makes it to have competitive advantages over its rivals. Currently, the grocery store has 450 customers. Presently, the grocery store has three departments with a total of 50 sellers. The main seller in this business is the product selling department. Basically, the role of the middleman to this market entails buying foods as well as other items from manufactures or farmers, storing and then displaying them for the benefit of consumers. He also aids the owner in seeking potential buyers for any category of food products the business stores and sells.

In lowering the transaction costs for the sellers and buyers, the first task he undertakes in moving information between them. Likewise, he takes the task of seeking producers, especially farmers, with food products that customers mostly wants and informs the owners. In case the owner decides to purchase them, he does it on behalf of him. Lastly, he assists in delivering products from the store to buyers who may prefer such deliveries. Furthermore, the grocery store always tries to match any type of coupons which are offered by their rivals in the industry. In the process of managing their transaction cost, he keeps tries to ensure that their transactions have been lowered for their benefit.

Between the buyer and seller, the buyer seeks to inform the sellers about the products stored in the grocery store. For seller-middleman, the middleman assists in informing the seller about the potential places he can obtain products at an affordable price as well as the potential customers for them.

In this market, trust is established between the seller, the buyer, and middleman. For instance, the seller beliefs that the middleman will assist him obtaining products from trusted suppliers at an affordable price as well as obtaining potential buyers for them. This entails marketing the business efficiently. The buyers have a strong belief that the products supplied by the seller the capacity of meeting his or her needs. This is what makes the grocery store to keep on retaining its customers as well as attracting new ones. The grocery store stocks wide range firm products such as bananas, apples, artichokes, parsnips, beans, citrus fruits, cucumber, celery, carrots, tomatoes, grapes, fresh cut vegetables, and so on.

Forces of demand and supply is the main mechanism that is used to set prices in this market. Conversely, in this market, the quality of the products offered or the after-sales services are set through the aid of the seller and the middleman. Innovations are the key driving factors in Wegmans Grocery Stores. What the owner first takes into consideration is the competent or efficient utilization of the modern technology. This is achieved through relentless repositioning of the business so as to accommodate that technology.  In order to be in the position of catering for a wide variety of buyers, App-enabled services are one of the innovations that are used. The reason for that is because it enables the grocery store to be able to connect with consumers both outside and inside of the store. Through assisting them to avoid spoiled products, spot discounts, confirm their purchases, the market is given the opportunity of offering quality products and services to them.