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UNDERLYING FORCES Demographics, Beliefs, Values, Cultures, International Events, Discoveries, Resources, Natural Events
Societal Element Changes Energy and the Physical Environment Labor & Human Resources Technology Economic Climate Regional & Local Issues International Trade Market System
Political System
Political System
Ownership of Resources
Markets Government Involvement
Ownership of Resources
Markets Government Involvement
Democratic Socialism
Ownership of Resources
Markets Government Involvement
Communism
Ownership of Resources
Markets Government Involvement
Demand is a Schedule of the different quantities of a good or service that a consumer is Willing and Able to purchase at each and every possible price
Determinants of Demand
Determinants of Demand
Income
Normal Goods and Services Inferior Goods and Services
Price Price of Substitute Goods and Services Price of Complementary Goods and Services Attitudes and Tastes
Institute of Modern Sciences & Arts (IMSA)
Glasses 8 6 4 2 1
Glasses Demanded
The lower the price, the more of a good or service that will be purchased, the higher the price, the less that will be bought
Summation of all individual demand curves in the market Law of Demand Downward Sloping Determinants of Demand
Supply
Supply is a schedule of the different quantities of a good or service that a seller is ready and willing to sell at each and every possible price
Price of Product
Quantity Supplied
Institute of Modern Sciences & Arts (IMSA)
P
S firm 1
Q firm 1
S market Q
Marginal Cost
The additional or extra cost incurred in producing one more unit of a good or service MC = TC/ Q
Price, Cost
MC
520
540
560
Quantity Produced
MC
Q1
Institute of Modern Sciences & Arts (IMSA)
PE
P S QE
Institute of Modern Sciences & Arts (IMSA)
Quantity
labor Signals to produce more or less, to enter new markets, produce new products, etc.
P1 P0
D1
D0
S
Q0
Q1
P0
D S Q1
Q0
P
International Market Price Controlled Maximum Price S QS Quantity of Oil QD D
Provides Incentives ... to consumers, producers, labor and owners of productive resources Allocate Resources ... alternative ways to provide goods and services Affect Distribution of Income
Environmental Scanning
Analyzing and Forecasting Environmental Change
Television technologies (probability, year) T1 interactive (.9,2010) T2 digital (.7, 2010) T3 HDTV (.8, 2010) -10% in 2 years Enhanced 50% in 3 years Enhanced 50% in 3 years -60% in 2 years
-10% in 2 years
Short-term Long-term
Organizational Change
Inform Top Management
Poland Case
Problems of a Socialistic System Everybody has money Too much money chasing too few goods Money becomes worthless Resort to barter Long lines for food
Institute of Modern Sciences & Arts (IMSA)
Poland Case
Poland Case
How well can government controls replace the free enterprise system?
What is happening in Poland today?