Pricing And Output Decisions Of Businesses Marketing Essay

Market structure is the number of buyers and sellers in a market. There are different market structures such as Perfect Competition, Monopoly and Oligopoly and are discussed below:

1.1 Perfect Competition

A market structure where there are different sellers of the same product then the firm’s price determination and the output decision depends upon the demand for their products. In a competitive market buyers actually determine the price and firm take the output decisions as compare to the demand for the product because every firm tries to offer lower prices to their customer to increase their market share.

1.2 Monopoly

It is the market structure where it has monopoly and is the sole provider then price determination and output decision lies by the firm because in a monopolistic market the firm is the price maker and they can charge whatever price they want and customer have to pay because customers will not have the choice to buy somewhere else with a lower price, firm will produce with its full capacity because the they will be bound to fulfill the demand as a whole for their products, normally multinational firms operate in such market structures.

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1.3 Oligopoly

A market structure where there are several large sellers of the same products then the sellers have some control over the price because large sellers normally set an ongoing rate for their products i-e they all charge the same price and then it depends upon the customers from whom to buy. Sellers may charge the same price but there will be difference in the way they advertise their products and attract customers to purchase their products, in oligopolistic market firms take decision of output in the light of the demand from their customers towards their products.

P2

Illustrate the way in which market forces shape organizational responses using a range of examples.

2.0 Market Forces

Forces that determine the price level in the economy. Market forces can be;

Demand

Supply

Employees

Customers

Suppliers

Two things can happen with the demand and the organizations are bound to give response for both i-e Demand for products can increase and decrease. If the demand for product increases the organization’s response for the increased demand will be they will hire more workers and will produce with full capacity. If the demand for the product decrease there will be decrease in cash inflow of organization due to which their costs will exceed than their profit. Organization response for such situation will be that they will cut jobs of their employees to cut their costs.

Same as the demand two things can also happen with supply of the products. When there is increase in supply of products the demand will decrease while if there is a decrease in supply of the products the demand will increase. Organization’s response for such situation is that they can produce whatever the demand for the product they have so that they will not come up with an increased supply or supply shortage.

Employee is also the factor that can change the behavior of the organization. If government announces mini wage the organization must accept it and must pay their workers with a minimum wage. If do not pay it to their workers, their employees will leave their jobs and will work for another organization.

Every organization aim is to satisfy their customers with their products. If any organization producing fashion product but they do have continuous interaction with their customers as fashion changes after every specific time period the organization will lose their customers because they won’t be able to fulfill customer requirements and won’t be able to satisfy their customers with their products.

Every organization is dependent to its supplier and without supplies the production process is unable to run. If supplier increases price for the raw materials it will automatically increase the cost of production of an organization. If the products of an organization are price elastic, by changing the price there will a big in the demand of the product then the organization can either negotiate with the existing supplier or can change to another supplier, while if the products are price inelastic and by changing the price there will be no change in the demand of the product then the organization can easily their prices.

P3

Judge how the business and cultural environments shape the behavior of a selected organization

3.0 Political

This refers to the government policy such as government intervention in what goods and services to produce, which firm to subsidize etc. Political decisions also have an impact on business activities such as health and education for workers and the infrastructure of the economy. Nokia transferred one of its manufacturing facilities to India, it is important that Nokia have to follow all the rules in regulations set in India. The rules and regulations by India for Nokia may include that Nokia must be aware of the minimum wage, working hours per week and health and safety for workers etc. All the new law and regulations by the government affect Nokia’s operations.

3.1 Economic

Economic factors may include the economic situations as a whole. These factors include interest rate, exchange rate, inflation and economic development etc. Nokia’s Economic situation in Finland went to recession period once which decreased the level of income and resulted in decrease in demand for Nokia’s product. Due to an increase in costs Nokia cut jobs and unemployed some of their employees. Nokia must be aware of all such economic situations to be ready to handle them well.

3.2 Social

Social is about the society. Social factors may include change in taste, change in level of income, change in fashion etc. All the above factors affect the demand for the product, normally it happens with Luxury and fashion products. Nokia operates in all over the world with their products and consider the culture of every place they operate, now a day people want to have good looking and smart up to date phones, Nokia tries to be aware of every social trends in the society and come up with the demanded products by their customers.

3.3 Technical

This refers to a change and development in the way of production, as new technology improved the quality of products, increase in productivity etc. For example bar coding, online games, high definition TVs etc. Technology plays an important role in the success of Nokia as Nokia was considered as the market leader with its new innovation such as internet, email and networking etc. Other rivals took market position from Nokia and Nokia must be aware of any new innovations and add them with their products to take their market position back.

3.4 Legal

This refers to the new laws applied on businesses by the government. Government passes different new laws after every specific time period which increases cost of the businesses. Such laws may include age discrimination, increase in minimum wage etc. Nokia operate where it is very difficult to have a product different from its competitors. Before operating in any country Nokia must register its company with a government and get a proper license to operate there. Nokia must protect the right of their designs so that they do not fall into victim.

3.5 Environmental

Environmental factors include a change in weather, climate. Environmental changes affect businesses such as farming and tourism. Environmental factors are the external factors which firms have to consider due to a global change in the economy. Nokia must be friendly with their customers to operate in appropriate manner as they water proof cell phones, phones with a plastic body which can be unbreakable etc.

3.6 Environmental Culture

The attitude, behavior and the knowledge in a society is called the cultural environment. Cultural environment can be of two types discussed below;

3.6.1 Internal Culture

Any attitude, behavior, action or policy developed among people in the company is called the internal culture of the company. Nokia’s internal culture is that there is a team work system among employees and every employee has the right to share their ideas for the success or the achievement of the company.

3.6.2 External Culture

Focusing on company’s own mission and needs of the customers that the company can quickly respond is called the external culture. Nokia’s external culture is that they give customers service to their customer as their first aim is the customer satisfaction and to achieve such satisfaction they always try to come up with high quality of products. Nokia always have an interaction with their potential customer to gain new ideas from them. Nokia always conduct their business in ethical, legal and socially responsible fashion.

M1

Compare two organizations on how the cultural environment shapes the behavior of the organizations

4.0 History of Nokia

Nokia is the world’s largest phone manufacturing company and around 132,000 employees are working with them around the world, the organization is operating in more than 120 countries. Nokia has 146 years history, between 1865 and 1967 Nokia merged with rubber and cable firms to set a new Nokia corporation in electronics. In 1992 Nokia decided to come up with telecommunication business, by the adoption of GSM standard the CEO decided to put Nokia at the head of the phone, they brought boom in demand for their product due to which Nokia is known today as one of the leaders of the telecommunications industry around the world. Nokia was not always involved in cell phones, in the past the company used to sell everything from tires to rubber boots however a change in the business world forced Nokia to take a new direction. The CEO of Nokia Jorma Ollila, is responsible for this company’s new direction and Nokia is doing excellent business around the world.

4.1 Internal Culture of Nokia

The internal culture at Nokia is that there is a team work system among employees and every employee has the right to share their ideas for the success or the achievement of the company.

Nokia always try to hire young and newly graduated employees to get new ideas from them for the success of the company.

They give on the job and off the job training to their employees before they get start with their job and are properly guided by the managers.

Employees also have the right to make teams of their own choice and have the right to make the decisions while they are facing minor issues during production while final decisions are made by the upper level managers and others are bound to follow them.

They just deal in cell phones industry not involved in multi products as compare to other different organizations such as Apple, Samsung, and LG etc.

4.2 External Culture of Nokia

Nokia’s external culture is that they give customers service to their customer as their first aim is the customer satisfaction and to achieve such satisfaction they always try to come up with high quality of products.

Nokia always have an interaction with their potential customer to gain new ideas from them and fulfill them in a best possible way.

Nokia always conduct their business in ethical, legal and socially responsible fashion. As where ever they operate they always clear all the legal formalities and bringing products that is socially acceptable.

Nokia is carrying research on mobile phones with the new concept of Sensory such as smell sensory, hearing sensory and touch sensory.

Nokia segmenting market as male and female of the ages 25-50 years, and segmenting different level of users.

5.0 History of Samsung

Samsung started a small shop in Daegu, South Korea and then gradually expanded their business starting from Ship Company to insurance. In 1969 Samsung started electronics business initially starting from TV’s but Samsung started their telecommunication in 1977. In 1977 the very first cell phone that Samsung launched into market was Samsung SH-100.

As the time passed Samsung captured a lot of market share and became second biggest handset seller after Nokia and now days it is going more rapidly in telecommunication industry in developed countries. Now Samsung have launched such fascinating and facilitating cell phones that they made worry HTC and APPLE about their market.

5.1 Internal Culture of Samsung

To access the productivity solution and resources there is a large difference between opinion of two groups with IT executives of 49% and 28% of employees agree with it. 49% of employees surveyed about the top priority to share large files as compared to IT executive.

Channels are the company for customers that’s why companies select their company carefully. Company is quite careful about dirty, inefficient and unpleasant of their internal environment.

There is a top down command structure where the idea from the subordinate is not being loved by the managers and uses them for the achievement of the company.

For the intermediaries, companies try and implement training programs.

An employee does not keep alert by the upper level and sometime the unauthorized people talk about the company.

Periodically, producers modify its internal channel programs. Modification becomes more necessary when internal distribution channel is not working as it is planned

5.2 External Culture of Samsung

Samsung follow simple business philosophy i.e to devote their talent and technology and create superior product and services to contribute and succeed in global society.

Samsung work for social welfare for people and community in many different ways. The current are on which Samsung focus is to investing in teenager’s futures providing electronic dictionaries etc and literally support about science education and creative thinking.

Samsung started social contribution to encourage teenagers and children’s by providing museum and invite the teenagers to come and have fun in Samsung children’s museum.

M2

Which organization is most effective and on what basis you analyzed it as superior or weak.

6.0 Nokia has a Strong Culture. Why?

Employees working with Nokia have clear objectives and have a clear guidance towards their jobs. Every employee knows their responsibility in their teams as they have a team work system.

New ideas from their employees are appreciated by the upper level of managers which is the best way of motivation as well and every employee has the right to share their ideas whether the employee is the new comer or old one.

Employees feel as they are a part of the company and with clear priorities well understanding among their teams, employees are giving on the job and off the job training to do their job in a best possible, these are all such factors due to which employees work really hard for the success of the company.

Nokia is planning to spend and invest a lot on new technologies as they made a contract with Microsoft for their Windows cell phones, a new phone device for the society.

All the above discussed factors made a clear way for Nokia of having a strong culture, all the factors are the advantages for Nokia towards their success.

6.1 Samsung has a Weak culture. Why?

Samsung have group working system but they do not share their ideas which are a point of weakness among their employees, they may not have a clear goal towards their achievement.

There is always communication problem because there is a top down command structure all the decision rights are with the upper level managers and they do not love the ideas from the subordinates. The Upper level managers think that the best ideas are the one they come up with.

Any employee work with Samsun for more than 5 years those employees then make fun of the company due to which Samsung have a high labor turnover rate this is because employees do not have any rights of communication and decision making and they are getting demotivated.

Employees of Samsung having confusion and poor attitude during their job can definitely affect the quality and will affect the performance of the employees which can be the disadvantage for Samsung.

D1

Give recommendations how your selected underperforming organization can overcome the deficiencies

7.0 Recommendations for Samsung

Samsung must have clear mission to have a strong and successful culture. They must give goals to every employee, guide the employee, give a time frame for that task and control every employee by the managers to see whether they are doing their properly or not.

Samsung must have cooperation with their employees, they must take action on what problems are their employees facing, they must give some rights of decision making to their employees, they must not ignore the ideas arising from their employees and the upper level manager must appreciate their ideas.

Samsung must keep its motivational level high, they must treat their employees with monetary and non monetary rewards. Motivated employees never compromise on quality and nor they change their performance All the employees must keep alert by the manager if any situation is going to happen.

Samsung must also give on the job and off the job training to their employees about their jobs and must train their employees well on how to satisfy the customer in Samsung outlets while purchasing Samsung products.

There must be a friendly environment among employees. Samsung is full responsible to have a friendly environment and must aware their employees about the attitude and behavior inside the company and make their employees to accept the attitude and the behavior of the company, by doing so employees will always have good interaction among each other and will love to work with each other.