Microeconomics case - Microeconomics Essay Example
As the US president, George bush put it that if there if is any owner ship of capital inform of investments, you have a vital roles to play for the future of the US because there are very many opportunities to be exploited in the US - Microeconomics case introduction. There is continuing changes in the American society where by the investors have to meet the needs and choices of the American people, Consumer Products Inc (CPI) being one of the players in production of the consumer products has the challenge to utilize the available opportunities by producing better products that will beat the competitors while meeting the needs and specification of the customers.
One of the major opportunities in the US for small businesses like CPI is the governments support for better investments that can be reflected in the fast growth of the businesses. Through the governments tax cut to the house hoods and small firms like CPI, they have been given a humble opportunity to have more money to spend and to invest in their business to counter the great competition from major firms like the Gillette Colgate, Gamble, etc. the small firms received a $ 75 billion tax relive in order to give them incentives for investments in plants, equipment and creation of new jobs in 2001- 2003 presidential tax cuts. The major challenge to these opportunities is the changes in life of the Americans where by the federal government should put in place policies that can also favor the small firm’s growth.
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There are other global challenges that the firm has to look at critical while making the decision for expansion, these include:
1. Is there future expectation of spillovers?
2. Can the federal government of US calm down a troubled market
3. They have to realize that globalization has brought about financial crises and their frequencies.
For the firm to achieve its goal to expand, since it has a limitation of the capital it should invest in products that have a big market share, like the shade of youth. The firm needs to carry out critical market analysis to know where the other product needs to be modified to meet the market needs in order to be come more competitive. The firm should carry out SWOT analysis and know where to it strengths, weaknesses, opportunities and threat lie, the results of this decision should be used in decision making The cost benefit analysis of the cost of capital if at all it will have to borrow the capital needs to be analyzed. Proper identification, planning, implementation and evaluation of the expansion strategy need to be carried out.
Among the countries the Consumers Products Inc should expand is Canada, this is because Canada is located very close to the United States, the overhead operating costs for businesses are also very low, the growth in the entrepreneurial acumen is bringing about great interest to the united states firm private and public firm and this coupled by the fact that the country is fully industrialized, the major cities that are very conducive for expansion by CPI are Ottawa and Toronto. In the US, the major cities conducive for expansion of the business include Las Vegas, Riverside San Bernardino, Orlando and Las Vegas Paradise.
The microeconomic factors that need to be considered by the firm include the behavior of the competitors and changes in the market forces. The macroeconomic factors that need to be identified include the GDP, employment, inflation, monetary and fiscal policies of the whole economy.
Financial and economic considerations, retrieved on 28th, august 2007, available at www.for.gov.bc.ca/hfd/pubs/docs/Mr/Rc/Rc001/Rc001-2.pdf
The white house, retrieved on 28th, august 2007, available at www.whitehouse.gov/news/releases/2004/08/20040809-9.html