This website uses cookies to ensure you have the best experience. Learn more

Business Enviroment Essay

2566 words - 11 pages

3.1:
Explain how market structures determine the pricing and output decisions of businesses?

How market structures determine the pricing and output decisions of Ollo:

Firms’ pricing and output decisions depend onbarriers to entry and the behaviour of competitors.The actions of one’s competitors can easily influence the behaviour of afirm.This is proper for an oligopolistic industry whereby firms display mutual interdependence.Ollo is an oligopolistic business with Banglalion & Qubee as their major competitors.If Ollo sets a price higher than that charged by others, the company can expect to lose a lotof sales.Moreover, there are some barriers of entry Ollo must consider before ...view middle of the document...

Lastly, when considering the marketing aspects of pricing we must consider the following:

1. Brand loyalty.
2. Customers’ perception of prices.
3. Competitors’ price, and
4. Maximizing profit.

The assumption of profit maximization provides a basis for beginning to look at the output of individual firms.The optimal level of output is where either profit is maximized or losses are minimized. If a firm is trying to maximize its profits in the short-run, there are two equivalent ways in which the firm can achieve this objective:1. The firm can produce at the point where the difference between Total Revenue (TR) and Total Cost (TC) is at a maximum.2. The firm can produce at the point where the difference between Marginal Revenue (MR) and Marginal Cost (MC) is equal to zero. Although as a new company Ollo cannot aim to maximize its profits yet. Thus, in order to gain strong brand loyalty Ollo is offering relatively low priced packages to
exceed customers’ perception over their competitors.
 They are providing a volume of 3.5 GB at the price of 500 BDT1 while Banglalion provides only 2.5 GB volume at the price of 600 BDT2

.Moreover, Ollo is providing prepaid modem at the price of 1499 BDT while Banglalion is charging 1999 BDT for their USB modem. There is a chance of loss but the firm will continue to operate in the short-run as long as there is a positive contribution margin and the firm is recovering some of its fixed costs.

1. http://ollo.com.bd/get
2. http://www.banglalionwimax.com/index.php/products-a-services/prepaid-plan

3.2: Illustrate the way in which market forces shape organizational responses using range of examples?
Ollo’s response toward deman
d
 –
 
Business cannot sell anything unless there is a demand for it. People must both want a
product and have the money to buy it. How people will buy Ollo’s service depend on the
following:

Price
 –
 For the individual consumers, a fall in the price of an item makes it cheaper compared toother goods. A fall in the relative price of an item increases demand for it.
A fall in the item’s price also means that people with lower incomes will also be able to
afford it. Thus the overall size of the market for the item increases.For these reasons, to penetrate and increase the market share Ollo has lowered theirservice price which has increased demand for their product.

Substitute
 –
 People may change from one product to another, as the relative prices changes. As asubstitute product of Banglalion & Qubee, Ollo has decreased their price to attractcustomers to switch.

Complementary products
 –
 As the use of computers and laptops are increasing throughout the country, the demandand market for wireless service is rising as well. Feeling this Ollo has decided to expand theirservices to any one division among Shyllet, Chittagong, Barisal and Rangpur.

Ollo’s response toward supply –
 
Supply depends largely on price. The higher the price that a product can...

Other Papers Like Business Enviroment

Impact on the Enviroment Essay

1589 words - 7 pages facilitiy has been open since 1975. This facility has a mulitude of functions, however with recycling computers in 2009 the center launched into a new business and they had no idea how big the program would be. Recycltronics created jobs for people and provided a place to take old computers to be recycled. This Recyling center has devloped into a win – win situation for employees with disabilites and consumers. When a consumer donates to the center

Enviroment Essay

2519 words - 11 pages turn to be reluctant to attend seminars and training of ESD. e.g. Business man can see it as a loss to close his business for a day in order to attend ESD meeting. 9.Complexity of sustainable development concept. The people involved in sustainable development have failed to clearly integrate education on sustainable development. They see it as tough task of defining teaching and implementing sustainable development. Thus becoming a big

Prison Enviroment

387 words - 2 pages affected by the environment. If there are any improvements that can be made I will discuss them also. THE ENVIROMENT Not at all like home, is prison not the place to enjoy life. Inside the overcrowded, dirty, concrete walls danger lurks. Hundreds of troubled people are housed together living their lives. Prisoners always have to protect themselves from other inmates whom are violent and have no care for others. The management and custody

Enviroment Lab Assignment

816 words - 4 pages Environment Ashford University for SCI 207 1. What are the three everyday products and practices that contribute most to your environmental footprint? In our everyday life, we use three products and practices that most contributes to our environmental footprint; we use our car everyday to travel back and forth to work and around town. We utilize heat to keep us warm and electricity to have lights to see. These three products are one of the

Macro Enviroment Of Kfc

1606 words - 7 pages PENYERAHAN DAN PENILAIAN TUGASAN ASSIGNMENT SUBMISSION AND ASSESSMENT _________________________________________________________________________ OUMM2103 ENTREPRENEURSHIP SEPTEMBER 2014 _________________________________________________________________________ ARAHAN KEPADA PELAJAR / INSTRUCTIONS TO STUDENTS 1. Tugasan ini mengandungi SATU (1) soalan sahaja yang disediakan dalam Bahasa Melayu dan Bahasa Inggeris / This assignment

Influences Of Enviroment On Humanbehavior

1116 words - 5 pages Yulawnda Patton HN 144: Unit 9 Assignment Kaplan University LeRoy Karas was a young outgoing teenager who was the eldest of two boys. LeRoy had the physical ability and potential to become a football phenomenon. His parents favored him over his younger brother Elroy who was the complete opposite of LeRoy. Physically LeRoy was bigger than most of his peers and his athletic capabilities led him to be selected as an all-state linebacker during

Constructing Winning Teams a Work Enviroment

1335 words - 6 pages while keeping up with books, banking, and weekly shopping for the groceries and supplies that was needed to run the business. I dealt with it for a long time until I was able to find a something else that I would enjoy doing that would not take as much of my personal life away. I had to take a pay cut which really hurt in the beginning, but have since almost made up for it. Now I am in the same position again with my current company. I am not sure

Managing & Responding to Behaviour in a Learning Enviroment

4393 words - 18 pages Task 1: Describe and discuss the aspects of national legislation, which have relevance to behaviour in the learning environment. The National Legislation describes Crowds and the importance for safety. HSE talks about how important it is primarily a management responsibility and requires the application of the best practices of health and safety management. All who run venues, organise events or manage places, which attract crowds, should have

Time Management Skills and Project Management Skillls

1490 words - 6 pages they are qualities all employers and managers search for within candidates to enter a new company or business. Within the business enviroment, when managers are given tasks by their peers, the task comes with a logical yet unflexible deadline, that must be met and maintained at all times. It is at this point that the development and maintanence of a personal schedule or diary is created and managers need to ensure that it is understood and

Green Business

2270 words - 10 pages Executive Summary As the society advances and expands, businesses are faced with challenges of maintaining social responisibility through the enviroment while at the same time generate profits for their shareholders. Can a business achieve both goals without jeopordizing their economic value? In order to answer this we analyze three factors that directly affect green business strategies. Ethical consideration – Ethical consideration

Pestel Analysis

829 words - 4 pages 2.3. PEST ANALYSIS POLITICAL/ LEGAL ENVIROMENT Government and RBI policies affect the banking sector. Sometimes looking into the political advantage of a particular party, the Government declares some measures to their benefits like waiver of short-term agricultural loans, to attract the farmer’s votes. By doing so the profits of the bank get affected. Various banks in the cooperative sector are open and run by the politicians. They

Related Essays

Business Enviroment Essay

2808 words - 12 pages The Business Environment Unit 1/Assignment 1 Callum Whitehead Introduction In this assignment I am going to be describing the type, purpose and also ownership of two contrasting businesses. I will then look at stakeholders and look how they influence the businesses, look at how they are organised and explain how their style of the organisation helps to fulfil their purposes. Task 1 (Part A) My 2 contrasting organisations: 1. NHS

Contempoary Business Enviroment Essay

531 words - 3 pages has strong ethical values and an ethical mission statement as follows, 'Starbucks is committed to a role of environmental leadership in all facets of our business.' Weaknesses. Starbucks has a reputation for new product development and creativity. However, they remain vulnerable to the possibility that their innovation may falter over time. The organization has a strong presence in the United States of America with more than three quarters of

The Business Enviroment Essay

543 words - 3 pages The Business Environment It is true that the start up phase of the business lifecycle is the hardest one for a business to survive. Getting a business established will involve translating the business concept into reality. This does not, however, guarantee success in the other stages.The start up phase of a business has many challenges. To successfully pass this stage you will need to overcome these challenges. Businesses are faced with high

Internal Communication In Business Enviroment Essay

2325 words - 10 pages . Empowerment 3. Brand Promise and business ambassadorship 4. Co-Ordination and Orientation of Teams STAGE 3 EXECUTIVE SUMMARY The internal communication in any organization is the most effective tool to increase productivity and motivation. Engaging employees and sharing the vision of the leadership is an important step in creating high performance organizations. Effective internal communications creates an