The Economics of Markets/Advanced Managerial Economics (Essay Sample)

THE ECONOMICS OF MARKETS / ADVANCED MANAGERIAL ECONOMICS Students name Institution Course Tutor Date Acknowledgment I thank my supervisor for their hard work and dedication during this project. I have found your insightful counsel and recommendations to be quite helpful in finishing this task. I feel you owe me much for this guidance, and I will always appreciate any kind soul. I want to state that I finished this assignment and did not use anyone else's work. Table of Contents TOC \o "1-3" \h \z \u Acknowledgement PAGEREF _Toc159778146 \h 2Definition of business firms and business environment PAGEREF _Toc159778147 \h 3Impact of Political system of a nation on business firms PAGEREF _Toc159778148 \h 3Impact of Legal system to the firm PAGEREF _Toc159778149 \h 3Effect of Economic system to the firm PAGEREF _Toc159778150 \h 4Effects of Social and cultural factors on the firm PAGEREF _Toc159778151 \h 4Effects of Technological progress and ICT on a firm PAGEREF _Toc159778152 \h 4Ecological, demographic and international factors affecting a business PAGEREF _Toc159778153 \h 5Conclusion PAGEREF _Toc159778154 \h 5References PAGEREF _Toc159778155 \h 7 THE ECONOMICS OF MARKETS / ADVANCED MANAGERIAL ECONOMICS Definition of business firms and business environment A business firm is a company or entity that engages in business, manufacturing, or professional operations for profit. These operations often entail manufacturing and selling items or services to clients or consumers in exchange for monetary compensation. The business environment is defined as all the elements that prevent a business from running seamlessly (Adrian Palmer and Bob Hartley, 2006). These components have a detrimental effect on the way the business functions, either directly or indirectly. However, through this business environment, the company might be able to identify various opportunities and tap valuable resources. Business environments are classified into macro and micro (Ian Brooks, Jamie, and Graham, 2004). Impact of the Political system of a nation on business firms The political state of a nation is an important aspect for directors to consider in everyday company operations. The political environment comprises three components: the amount of legislative activity, the various kinds of laws passed, and the overall political stability of the government. The stability of any country's politics plays a key role in the success of any business. The business will thrive well when all the major political factors are conducive to its operations. An unstable political environment in any nation with political scrambles is prone to volatile changes in the existing administrations (Helen Deresky, 2017). This leads to a disruption to any business and a significant loss. However, good trade relationships between two nations are a major element that directly influences the business's success. For example, in recent years, Samsung has encountered various challenges in its home country, South Korea. This is due to the political unrest between South Korea and North Korea. However, nations such as China and India offer a conducive environment for the business, which enhances the exploitation of the new market where such developing economies exist. Impact of Legal system on the firm These regulations in a certain country are set to regulate every business within the country. In America, laws enacted by Congress and various regulatory agencies address issues such as competitors, wage rates, preservation of the environment, security for employees, and trademarks and copyrights. For instance, Samsung has encountered heavy penalties for imitating other companies' systems on Apple’s iPads and iPhones (Shamout & Elayan, 2020). These acts affected the reputation perception of Samsung's image in the consumers' minds. This also took a different turn when the Samsung Galaxy Note 7 started exploding—more than 500 customers were disappointed and filed lawsuits against Samsung Company. The dissatisfied customers sought to be refunded their money and more compensation, which brought a huge loss to the company. It becomes more difficult for any company to find a way out of such issues, especially in developed countries concerning different lawsuits. Samsung is required to adhere to various employment and tax-related laws. Without complying with such regulations, the company might face legal fines, leading to a big loss and, thus, failure. Effect of the Economic system on the firm Consumers are highly the most targeted clients in any business. However, any economic crisis influences consumers' disposable income, particularly in developed countries. This allows corporations to expand into profitable ventures by investing in emerging countries. Furthermore, excessive stock market volatility and constant exchange rate fluctuations significantly impact the company's financial health. For example, Samsung weathered the Korean economic crisis, earning around KRW 200 trillion despite the Korean economy's high family debt levels (Vaceslavovna, 2020). However, Samsung has considerably impacted the Korean economy since it has employed many citizens in its operations. Furthermore,  lack of employment results in less discretionary money in people's hands, which reduces their purchasing habits. The central bank's monetary policy decisions are essential for promoting and stabilizing the economy. The goal of the central bank's targeting of metrics like employment and inflation is to keep the atmosphere favourable for economic expansion. Businesses like Samsung see higher demand for their goods and services during periods of moderate inflation and steady economic growth, contributing to their continued growth and expansion. Effects of Social and cultural factors on the firm This component includes a variety of customs, traditions, and behaviors that differ from one culture to another. Such differences in the social context affect the demands of various products, which later influence the willingness of a consumer to purchase the product. Samsung, for example, has effectively implemented its strategy of thinking globally while acting locally. Despite its development into numerous nations, the corporation has had to tailor its products to meet the specific requirements of its clients regionally. The rapid and swift changing of consumers' preferences might positively and negatively influence the business. For instance, Samsung has taken care of such socio-cultural elements when strategizing its marketing efforts (Lin, Xiaoyu, & Jianqiang, 2023). This is evident from the fact that Samsung mobile devices, such as tablets and smartphones, have already responded to the desire for large-screen cell phones and mobile devices. On the other hand, its Galaxy brand has gained popularity in the major markets. Samsung is also acting responsibly and recognizes that the problem of corruption may represent a severe threat to its reputation as a company. Furthermore, the growing tendency of working from home has boosted the availability of a wide range of items, particularly digital ones, for work and leisure. Furthermore, South Korea has a high literacy rate, meaning there is an urgent need to raise awareness about using digital gadgets. This indicates a surge in demand and sales of digital products. This increased use of smartphones creates a big opportunity for Samsung. Effects of Technological progress and ICT on a firm Technology may stimulate growth in any economy, especially capitalism. New software and technology that enhance output while cutting costs may be an organization's most important assets. Businesses that use these technologies and make R&D investments can provide innovative products that adapt to changing consumer demands and tastes. Constant innovation can help a business flourish by drawing in new clients and gaining market share, keeping it ahead of rivals. Samsung, for example, has made significant investments in research and development. Combining in-depth research and technological know-how has made Samsung's SUHD televisions particularly appealing to consumers. Predictive maintenance makes significant use of it, reducing downtime. The Internet of Things is also growing more and more important. It contributes to the ongoing advancement of sensors in electronic devices for consumers and enables electronic manufacturing devices to self-process and archive information while being technologically connected. In the current world, for one to present a unique brand feature, every company is trying to implement innovative features to suit its best interests. For instance, Samsung, being a tech company, has been able to bring more innovations to its competitive edge. This has enabled the company to continue launching new products into the market (Khalid A nation with a well-developed network enhances the growth of various companies. Several innovative technologies have surfaced in the electronics sector, such as producing electronics using recyclable and biodegradable materials or green materials like microbial components. Additionally, using AI to manufacture in the electronics sector has improved design procedures. Ecological, demographic, and international factors affecting a business The operations and expenses of a firm might be impacted by compliance with environmental standards. Businesses can obtain a competitive advantage by minimizing waste, conserving natural resources, and limiting their carbon footprint by prioritizing sustainability and environmental stewardship. For example, Samsung has enhanced its program of going green to reduce its energy consumption. All of the company's workstations have energy management technologies fitted, and energy expenses and gauges have been effectively tracked. Changes in the population...