Module 4 - Effects of the Economic Environment on Business Strategy Flashcards
rivalry or competitiveness between or among parties to deliver a better deal to buyers..
Competition
the firms all produce identical products and each seller is small relative to the total market.
Price taker market
Can sell all their output at the market price, but cannot sell any of their output at a higher price.
price takers
these are firms that face a downwards-sloping demand for their product.
price searchers
Market Entry Barriers
(1) Economies of Scale
(2) Control over an essential resource
(3) Government licensing
(4) Patents
Four Policy Options
(1) Control the structure of the industry
(2) Reduce artificial barriers
(3) Regulate the price & output
(4) Supply the market with goods produced by a government firm.
market characterized by “Single seller” of a well-defined product, which has no substitutes
Monopoly
market characterized by “Few sellers”. Small number of rival firms.
Oligopoly
a business undertaking owned, controlled, and managed by the state
Public Sector Enterprise (PSE)
Disinvestment/Privatization
(1) Revenue Collection
(2) Improvement in efficiency
(3) market discipline
(4) resources mobilization
(5) Direct participation of public
(6) encourage employee ownership
(7) reduction of bureaucratic control
these are the meeting place for people, corporations and institutions, that either need money or have money to lend or invest.
Financial market
Types of Financial markets
(1) Physical market vs Financial Assets Market
(2) Spot market vs Future market
(3) Money markets vs Capital markets
(4) Primary markets vs Secondary markets
(5) Private markets vs Public Markets
an organization that handles financial transactions for individual, groups and other organizations
Financial Institutions
purchase and sale of good and services by companies in different countries.
International trade
is a core principle of finance. A sum of money in the hand has greater value that the sum to be paid in the future.
time value of money
