INDIVIDUAL PAPER WEEK 6
MARCH 23, 2015
GOOGLE'S NEW WIRELESS SERVICE
About the end of March 2015 Google will begin offering its own wireless service. Google's market structure as a wireless provider will be an oligopoly market structure which is when a standardized product is sold by a small number of sellers. Providers must differentiate their services. Each provider makes its own decisions. The wireless industry is regulated so providers are not completely free to set their own prices and offerings. Google is starting its wireless service on a small scale. When Google enters a new market it usually ...view middle of the document...
Let us look at the current credit market conditions how that can affect the planning or operating decision.
Consumers and businesses are both watching their money very closely. Loan volume is driven at its core by loan applications, which are down in both sectors. —Bank with $192 million in assets
Economic indicators are broadly classified based on their timing, from leading indicators like the ISM report to lagging indicators like the unemployment rate. Leading indicators are those that change before the economy as a whole changes, making them very useful for investors looking to predict the future direction of economies around the world. Because the current global economic conditions and their effect on local macroeconomic indicators for your good or service.
Price & Supply Elasticity
Google's wireless services will be inelastic price demand because it is a regulated industry and the prices and offerings do not vary widely in the marketplace. Google's price elasticity of supply will be inelastic because of the huge costs in manufacturing and distribution infrastructure costs. Consumers’ sensitivity to price changes is measured by a product or service’s price elasticity of demand. Demand is considered elastic if a given percentage change in price causes a larger change in consumer demand. When Ed is greater than 1 then demand is elastic. Example: Given a 2 percent price decrease in cut flowers is a 4 percent increase in demand. (McConnell, Brue & Flynn, 2009, p. 115)
Demand is inelastic if the price change causes a smaller percentage change in consumer demand.
If Ed is less than 1, For example assume a 2 percent fall in coffee prices gives a 1 percent increase in demand, and then demand is inelastic. (McConnell, Brue & Flynn, 2009, p. 115)
Price elasticity of supply measures how long it takes a provider can move resources from one use to another. The faster a producer can shift resources the greater the price elasticity of supply. (McConnell, Brue & Flynn, 2009, p. 122)
Relative to its competitors, Google may have more price and supply elasticity than they do. Google already has its server farms and fiber-optic distribution network in place. It will have to build customer service and a retail outlet presence. Google's new wireless service will be much smaller Verizon and AT&T. It will give very few people a new way to make calls, send texts, and use the internet through their smart phones. But the impact is large." (Metz, 2015) Google wants the Affordable Wireless market.
One of the big efforts Google puts in to achieve is to ensure it will gain the market share to become a new wireless service provider. It plans to work with other company such as Cablevision Systems Corp; by doing so, they prepare to launch cellphone services that directly target Verizon and AT&T to offering lower prices and higher quality; Google will combine a network of Wi-Fi hotspots with its cellular...