Macro and Micro Economic Factors that Influence Plant Activity

(Part 2)

 

Microeconomics

 

ABC Complete Kitchens need to gain a basic understanding of our target market on a personal level. Our company needs to do research such as possibly do customer contacts either in the field or by phone a week after installation. This will allow us to understand customer needs and determine customer satisfaction

Operations here at ABC Complete Kitchens will be constantly using the latest techniques in forecasting to enable our managers to see future trends in our industry. Globalization will make it necessary to watch daily exchange rates for overseas markets. It will be important to maintain back-up plans in case of shifts in current market behaviors. (Smith, 2010)

 

Legal

 

It will be necessary for ABC Complete Kitchens to develop a legal strategy which is flexible to the market in which it is operating under. Different countries have very different political views, rules, and regulations regarding foreign trade. Here in the U.S. the Federal Trade Commission regulates our anti-trust polices. (Smith, 2010)
Obtaining Credit

In order for our organization to obtain and maintain significant line of credit using our tax ID number we will first need to start the process before we need the money. No institution will be willing to lend to our company if we actually need the money. ABC Complete Kitchens will need to utilize the good standing of the corporation so as not to have liability fall on any individual. (However an individual who backs the company is probably the fastest way to build credit.) There are many programs available which will build a company profile and report good standings to the credit bureau.

 

Reliable Market Conditions

 

Our executive management will need to study, view, and speculate on current markets using the latest information in order to determine reliable market conditions. Externalities such as weather, politics, and supply and demand all can have profound impacts on market reliability.

 

Avoiding Product Liability

 

Product liability is a maker or breaker in our business. One liability suit could cripple this company. We will start with educating our owner/employees in safety standards for our industry. To avoid all torts we will consistently go above and beyond what is required by law. We will maintain a standard of doing what is right regardless of cost. In the short –run it may cost a few extra dollars but in the long-run it will build a reputation for our company of being socially responsible. On the other-hand we will have a top-notch legal team on stand-by just in case.

In today’s business climate it is necessary to stay competitive through capital investment. By investing in the latest machinery and technology our workers can be productive. We also need to realize the importance of human capital as an invaluable asset through ongoing training and education for all employees. Economies of scale will result from our investment in the latest technologies and machinery as well, by increasing production and bringing down cost of output. Price elasticity is determined through supply and demand. When demand goes up prices adjust accordingly. ABC Complete Kitchens will need to gain exclusive knowledge through directly contacting our customers one week after installation of goods. Our organization will also need to become aware of daily exchange rates in overseas markets. Our organization will develop a legal strategy with a team of professionals who will be constantly advising and consulting with us. Credit will be established through the use of an online profile to build up our positive credit scores. Our employee/owners will be trained in the latest safety standards as per industry standards; however we will keep a legal team retained as a back–up plan for any possible product litigation.

 

Works Cited

 

Business Strategies for Organizational Effectiveness within the Global Perspective (Custom ed.). (2012). Retrieved January 14, 2012, from Vitalsource Web site: http://online.vitalsource.com/#/books/9780558870447/pages/17259874

Riley, G. (2006). In Tudor2u.net (Ed.), AS Macroeconomics / International Economy. Retrieved January 14, 2012, from Tudor2u.net Web site: http://tutor2u.net/economics/revision-notes/as-macro-capital-investment-spending.html

Smith, T. (n.d.). In Northcentral University (Ed.), Economies and the Legal Environment of Business. Retrieved January 14, 2012, from Scribd.com Web site: http://www.scribd.com/doc/46675812/Economics-and-the-Legal-Environment-of-Business-Paper-Final-Draft

Terry, Kristin. (2010, March 1). In Six Sigma (Ed.), What is SIX-Sigma? Retrieved January 14, 2010, from Six Sigma.com Web site: http://www.isixsigma.com/new-to-six-sigma/getting-started/what-six-sigma/

 

 

Economic Factors