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Econ 118 Guide

Econ 118 Guide - Economic Framework 1 Demand • Are...

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Unformatted text preview: Economic Framework 1. Demand • Are customers highly price (in)sensitive; growing rapidly/ or relatively mature? • Move w/ economic cycle?; Vary with the seasons of a year? 2. Supply • Many suppliers with similar products or few suppliers with unique? • High barriers to entry/exit? 3. Manufacturing • Capital intensive (i.e. electric power); labor intensive (advertising/auditing); or combo (airline transportation) • Complex/simple process? (microchips or toys?) 4. Marketing • Promoted to other businesses (3 rd party) or consumers? 5. Investing and financing • Assets short term? (commercial banks); long term (electric) Company Strategies 1. Nature of product or service • Unique products with high profit margins (product differentiation strategy) or offering nondifferentiated product at low prices – accepting a lower profit margin in return for a higher market share (low-cost leadership)...
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Econ 118 Guide - Economic Framework 1 Demand • Are...

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