We maintained several time horizons for our forward forecasts, from granular monthly forecasts to quarterly and annual forecasts to even five and ten year forecasts for the purposes of fund-raising and, well, strategic planning. One of the most difficult things to forecast was our adoption rate.
Conclusion The process by which businesses make decisions is as complex as the processes which characterize consumer decision-making.
The reliability and currency of the information a business uses, therefore, is of the utmost importance. What a business does with that data is decided by senior and top management. The major influences on their decisions may entail all or some of the following factors: Logic What the competition is doing The state of the economy A variety of other variable and unknown factors Logic Microeconomic data may be reduced to mathematical constructs from which logical decisions may be made.
Microeconomic data from this imaginary company has shown that its customers prefer navy blue, button-down shirts at a certain price. Logic would dictate that at least another 50, navy blue, button-down shirts should be manufactured and offered for sale.
Although that seems logical, it might not be the best choice. How does Firm A compete now? And if the share price declined, would there be further sales of the stock, bringing down its price even more? However, another factor is introduced before a final decision is made on the number of shirts to be made and at what price they will be sold for in the market.
Would the increase in marketing and advertising of blue shirts sell more shirts, and therefore meet or beat the competition? Microeconomic data has shown that in some cases a vigorous ad campaign is often a successful way to beat the competition.
For related reading, see: What Factors Influence Competition in Microeconomics? Economic Indicators to Know. Variables and Unknown Factors Variables and unknown factors may include a consumer desire for something new.
Consumers may inexplicably tire of blue shirts and prefer another color. Taste-makers and fashion trend-setters may show a preference for green shirts rather than blue shirts. Firm A may recover some of its costs by offering blue shirts at a steep price discount. But this, of course, hurts the perception of quality associated with the Firm A brand.
The Economics Behind Sneakers. All of these elements — the microeconomic data, the questions it provokes, the possible outcomes of each choice made in the decision-making process — are what business executives must consider to assure the success of their companies and maximize their profitability.
Each of these firms is determined to maximize its profits. Each firm is also aware that beyond a certain number of shirts produced and sold, the cost of manufacturing just one more shirt and selling it returns no more income to the firm than the cost of manufacturing the shirt.
Law of Diminishing Marginal Productivity.
This means that the many competitors are making the same or a similar product, and each of them has only a small fraction of the total market — the market share. In a perfect competition environment, shirt manufacturers have little or no control over pricing.
The price of a shirt is fixed at the intersection of the market demand curve and the market supply curve. This business reality leaves competing firms one option: The total cost of production subtracted from total sales revenue leaves total profit.
It is therefore critical that firms manufacture and sell the right number of shirts. But how do they decide on the right number?
Because the cost of manufacturing each shirt over a certain number increases as more shirts are made, a theoretical point is reached where making more shirts eats into profits and eventually causes a loss. Assuming the market price for shirts is high enough, a firm will make a profit when its marginal revenue is equal to its marginal cost.
Marginal revenue MR is the increase in total revenue a firm would receive from the sale of one extra unit.
How Can Marginal Revenue Increase? In the case of Firm A, which makes shirts, or for any firm no matter what it makes, if manufacturing and selling a single unit of a product costs less than the revenue it brings in, then the smart decision is to produce and sell the product.It is a fundamental mistake to see the enemy as a set of targets.
The enemy in war is a group of people. Some of them will have to be killed. Others will have to be captured or driven into hiding. This means a business owner should first consider the macromarketing environment to determine the viability of products and services before spending time and energy on trying to sell to a specific.
Abstract. The ubiquity of frustrating, unhelpful software interfaces has motivated decades of research into “Human-Computer Interaction.” In this paper, I suggest that . Demand Planning is a collaborative approach between the different functions in an organization – usually Sales, Marketing, Finance, and Supply Chain – that seeks to arrive at a single, unbiased, and consensual forecast of customer demand.
The assignment is in the form of a report which is aimed to support the proposal; “small business needs a different management style to large ones”. Report is broken down into different sections, where each section explains a particular subject.
In this report, a small description of small and. The environment which is not specific to a particular firm but can influence the working of all the business groups is known as Macro Environment.
The factors of the microenvironment affect the particular business only, but the macro environmental factors affect all the business entities.