1) What type of economic system lies between capitalism and communism? Explain w
ID: 2639886 • Letter: 1
Question
1) What type of economic system lies between capitalism and communism? Explain why it is more effective than other economic systems
2) Discuss the positive aspects of globalization, and contrast these with the negative aspects of globalization from the perspective of a small business. Be sure to address the pros and cons of outsourcing in your response.
3) How do downsizing and outsourcing influence the number of small businesses?
4) Identify the four Ps of marketing, and give an example how each of the four Ps can be used to market your favorite product or service
Explanation / Answer
1) Capitalism: Capitalism is based on private ownership of the means of production and on individual economic freedom. Most of the means of production, such as factories and businesses, are owned by private individuals and not by the government. Private owners make decisions about what and when to produce and how much products should cost.
Communism: Communism is based on principles meant to correct the problems caused by capitalism. The most important principle of communism is that no private ownership of property should be allowed. Property should be shared, and the people should ultimately control the economy. The government should exercise the control in the name of the people, at least in the transition between capitalism and communism. The goals are to eliminate the gap between the rich and poor and bring about economic equality.
These economic systems are effective becuase of Social Good, Equality, Human Nature, Freedom, Built on Democracy, and Growth.
2) Benefits of Globalization:
- Increased Competition: One of the most visible effects is the improved quality of products due to global competition
- Employment: With globalization, companies have forayed into the developing countries and hence generated employment for them.
- Spread of Technical Know-How: While it is generally assumed that all the innovations happen in the Western world, the know-how also comes into developing countries due to globalization.
- Frees management time, enabling companies to focus on core competencies while not being concerned about outsourced routine activities. Reduces cash outflow and optimizes resource utilization
Negative aspects of Globalisation:
- Globalization uses up finite resources more quickly.
- Globalization increases world carbon dioxide emissions.
- Globalization makes it virtually impossible for regulators in one country to foresee the worldwide implications of their actions.
- Possible loss of control over a company's business processes.
- Problems related to quality and turnaround time
3) Effects of downsizing and outsourcing influence the number of small businesses:
- Laying Off Employees: Outsourcing/Downsizing commonly results in the need to reduce staffing levels. Unless it can be planned through attrition, layoffs are inevitable. This is difficult at best and if not managed appropriately, can have a negative impact on remaining employees.
- Employee Rights Termination: Be careful with these employees, their performance might actually get worse as they recognize they are on their way out. Be careful also that they don't influence other employees (their 'friends') against you.
- Quality Risk: Outsourcing can expose an organization to potential risks and legal exposure.
- Employee/Public Opinion: There can be negative perceptions with the sympathy for lost jobs.
4) Four P's of marketing are 1) Product (or Service) 2) Place 3) Price 4) Promotion
For example we take McDonald's Restaurants:
- Product: The important thing to remember when offering menu items to customers is that they have a choice. Therefore, McDonald's places considerable emphasis on developing a menu which customers want.
- Place: Place in the marketing mix, is not just about the physical location or distribution points for products.
- Price: The customer's perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth.
- Promotions: The promotions aspect of the marketing mix covers all types of marketing communications. The methods include advertising, advertising is conducted on TV, radio, cinema, online, poster sites and in the press (newspapers, magazines).
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