SUMMARY CHAPTER 8

4.1 RECOMMENDATION

The company should go to the crisp market because Barker Ltd is not in a good financial position,because the low return on capital employed is considerably small and from Acid test ratio(0.3:1)shows the poor liquidity which may brings cash flow problems.Long run loans occupied 50% of the total capital employed,it exists risks.If business entries the market,they may cover the drawbacks,also the high level of possibility of success may bring more profit even though it is romaily`s market plan which can not be representative and over optimistic.Because the company`s USP gives the good information to consumers and may bring a lots of consumers as it is a niche market leads to the demand is inelastic and company can have more revenue.Cost on market research and product design are both important to analyse the market,innovate the products and extent the products range.However,the barriers of entry is high as 83% of the total market shares have constituted by 3 large firms,it can be a difficulty for moving into the crisp market.High loans should prepare to pay the interest.

Deeply Analyse"Durva Drinks Ltd

comment on DRAGONS` DAN

The people who discoverd the product is asking for 80000 investment and it constitutes 15%of the shares,therefore we can calculate the total asset is 533333 which is quite enough.And the dragon who asked more,and entrepreneur promised 35% of the shares which might be 228571 and the quickest in the market,develop the market range,finally,got the offer.Another dragon who gives the 5% each year 5 years.
The entrepreneur is 19 years old who finished A-level,also had the experience doing export and import between China.

In my personal opinion,the idea is quite good,but I donnt think it has a market in China,even exporting products to China,on the one side,it might be less competitive compared to the similar products in China,and asking 80000 which is large amount of money,most of the retailers in UK such as WHSMITH prefer the products produced from China.

RATIO

ECONOMICS

INCOME STATEMENT

it helps me a lot!!!!!!!!!!!!!!!!!!!!!!!!!!!!FROM MICA

FORMULA ABOUT BALANCE SHEET

total asset:non-current asset+current asset
total liability:non-current liability+current liability
net asset:total asset-total liability
net value(net asset):non-current assets+working capital(net current asset)-non-current liability
capital employed:net assets+non-current liability
non-current assets+working capital/net current liability
total equity+non-current liability
current assets:inventory+receivables+cash and other cash equivalents
working capital:current asset-current liability
asset employed:net current assets+non-current asset=capital employed

assets=liabilities+equity
annual provision for depreciation=initial costs-residual value/expected lifetime

BALANCE SHEET

"7"

A supermarket decides that it will open as normal on Christmas Day.



Generally speaking,as a consumer, I strongly anticipate that there are lots of shops or malls opening on Christmas Day with attractive decoration.However what will it influence the company?There are three sides which should be taken into considerations.

Consumers:

In most western countries,Christmas Day has the same treatment with Spring Festival in China,people are definitely hang out with family or friends celebrating this paramount day.A majority of consumers wish to shopping with friends and enjoying the Christmas atmosphere during shopping.Therefore,the demand on this special day will increase with an unexpected rate.Consumers will expend more than in normal days.



Company:

As I said before,the demand on Christmas Day will be inelastic and increased sharply,it is an vital opportunity for most of the companies to open as normal in order to meet the high demand,as a consequence,getting more revenue during the day.High percentage of the businesses survived only because they take well advantage of the particularly high demand in certain days,and become competitive among thousand businesses,at the same time because of the high demand,most of the companies reduce the prices of the products in this certain days as a strategy to have more quantity sold.Probably,they sell the products which is out-of date but will receive a good result,because of the demand for the products and high profits.In the real world,on Christmas day, most of the businesses prefer opening rather than closing.



LABOUR:
Labour is the greatest and the most valuable assets in the company.In this case,assume the business opens on Christmas Day,they should pay labours extra money,because they work more extra time on Christmas Day,which they are not supported to do.If the company is not following the law,they may be sued by the trade union.However,labours may feel lonely and demotivated,it leads to the low productivity but sales may not increase and cost is high but the company have to pay the extra money may be more than working days to the labours even though the productivity is low,therefore the company should think about it or taking other choices,such as employ part-time labours but the problem for them is hard to training them in a shot time period.

8 short tips

1.liquidity:the ability to convert an asset into cash without loss or delay.

2.Gearing: focuses on long-term liquidity and shows whether a firm`s capital structure is likely to be able to continue to meet interest payment and to repay,long- term borrowing

EQUITY:funds provided to set up the business,fund expansion and purchase fixed assets



3.DEBTORS COLLECTION PERIOD=debtors/sales *365

4.creditors payment period =creditors/purchase*365

5.average stock:is the average amount of stock stores in the warehouse

stock turn:it is the cycle of the stock by a period of time


6.ROCE(return on capital employed:is a measure of the value of the profit over resources used by business

return on capital employed:operating profit/capital employed

7.GP (gross profit):the revenue minus costs of sales.The gross profits shows how efficiently a business is converting its raw materials or stock into finished products.

8.NP(net profit): net profit is calculated by subtracting a company's total expenses from total revenue thus showing what the company has earned (or lost) in a given period of time (usually one year). also called net income or net earnings.

Moving to China

"APPENDIX A"



1.80%of all employees are in the union membership,the problem is that the a majority of the labour may ask high wages if necessary, it can directly impact the fixed costs and push up the total costs which might bring the negative effects to the company profits and liquidity,also high costs may lead to cash-flow,shortage of demand for example.Problems which can be a dangerous situation for company in a long-term run.



2.Compared to the annual pay of factory between CELLTON FACTORY and IN CHINA,salary paid to the labour in CELLTON FACTORY is 9-fold to in China,which is a good news for shareholders and investors who want to relocate the factory in China in order to gain a high level of profits.For shareholders,they may get more dividend with high level of growth in profit return,their shares can be more valuable and they can sell shares at a high price.And both of shareholders and investors are motivated when they receive the profit return



"APPENDIX B"

3.Net present value shows the positive figure at 5.7m,and this is a quite big value for the company(Net present value is the value which the company may gain in the future transfer into the current situation),+5.7 represents the meaningful situation of the economy for the company and it will encourage not only labours but stakeholders to achieve the objectives.Labours may be motivated as a result increasing the productivity and reducing the unit cost and the company will become more efficient and competitive.



"APPENDIX C"

4.Even though both sales revenue and net profit indicate the increasing trade 15% and 5% respectively.However it is evident the increasing of the net profit is one-third of the sales revenue,it may tell us the cost is increasing at the same time.The net profits may increase at a increasing costs,and increasing in costs may higher than net profits,which can be a problem to company



5. Capital employed(measured of the value of the resources used by a business) is 500m.It shows a large amount of money spent on resources,the resources are valuable and it indicates the price of the products are likely t be high,because of the resources/materials(variable costs) is high.High price may affect the demand for the products.

"APPENDIX E"
6.Compared the two line graph,it is clear that factory in China(450) gets the break even earlier than in CELLTON FACTORY(600).It will reduce the risks for the company and make the company safe(marginal safety).Capacity in China is greater than CELLTON FACTORY with 1000 and 800,the benefit for this is the company may get more profits because they have the ability to produce more,and can solve the emergency situations like if there is a high demand in a short period of time,the company with high level of capacity may overcome the problem quickly and flexibly.
Also,we can see that the variable costs in China is 18.5,which is lower than in CELLTON FACTORY with 25per unit,it means the variable costs of every product produced in China saves 6.5,if the company produce same quantity of products in both factory,the costs of the products produced in China will lower,therefore the company in China,can have such pricing strategy such as loss leader(which set a considerably low price in to the market in order to break the order of the market)and keep the price to gain more profits .They sell the same price to retailers which means that the company may gain more profits in China because of the low variable costs and fixed costs in China...

tired........

Not moving to China

1.The context indicates than HURBANK which produced luxury clothing and accessories.This can be a point which supports the main argument.Because,to be honest, according to the background of China,the level of development is not increasing as much as we expected,compared to other developed nations.Selling luxury products might be suitable for high level of consumers in China which only constitutes under 10%of whole population,therefore,producers may not sell as many as they expect,and the profit can not be satisfied as a consequence,it is a risk to sell luxury products in China.

"APPENDIX A"
2.Said that the labour productivity compared to five years ago is increasing by 40%,which shows the positive number,we can`t compare this figure with China because there is not data shows the productivity in China,but we know it is a good situation for CELLTON FACTORY.labours` satisfaction can be a factor which resulting in the increasing the productivity and because labours are satisfied with their works,it can reduce the labour turnover which can reduce the company additional training costs and increase the morale around the company affects the increasing in productivity.Absenteeism can relieve as well,it directly has correlation with the quality of the products and profits,as the absenteeism reduced,the quality of the products can be improved sharply which makes more profits for the company.high level of absenteeism can cause delay the production and machines may be depreciated and out of date over times,it can lead to high variable unit cost and less profits.

3.The shirts returned is almost none in CELLTON FACTORY compared 1%in China,it may illustrates the products`quality produced in CELLTON FACTORY is higher than China,it related to the reputation of the company (which is intangible asset)and loyalty of the products,the quantity demanded might be inelastic if the company has good reputation.Consumers may have loyalty to your company`s products because of the level of quality.If the elasticity of quantity demanded is inelastic, the company can rise the price if necessary and consumers may still expense as before,it can relate to the high dividend to shareholders.

"APPENDIX B"
4.The relocation costs in China is 22m,which is incredibly a huge amount of money,and it is also a risk for shareholders and investors.High fixed cost can level up the total costs,profits may reduce and even may get a loss,and small scale business can not afford this amount,if the company decided to relocate to China,the way where to raise this finance is problem. If borrowed from bank as a long-term loan, the high interest should be taken into consideration,and such non-current liabilities should be accounted into company balance sheet.

5.Lead time to retailers in CELLTON FACTORY is 3 weeks less than in China,it impacts on retailers,it may reduce the costs of the products supplied because the retailers may more happy about the high efficiency of the production and reducing the wastage to reduce the unit cost.

6.The change in the value of the pound relative to the Chinese currency is -18%,which show than there is a increasing to the value in China,oversea companies may costs more to achieve the same amount of money in 10 years ago,it can demotivate the investors and shareholders to put money in China,and the costs are higher than before in transfer into British currency,as a result,the profits they earn are much less.

"APPENDIX C"
7.Both sales revenue and net profit for the ending 1 June 2008 increased 15% and 5% respectively,compared with the previous year,and net profits shared one-third of the total sales revenue,which is considerably high,it shows how successful the company,it also shows how potential the company is relevant to the sustained increasing in SR and NP.

SUMMERY "USING OBJECTIVES AND STRATEGIES"

Objectives:the goals or targets should be achieved in order to realise the aims of the organisation.
Corporate objectives:the goals of the whole organisation.(coordinate the business and to give the sense of the direction)
Functional objectives:the targets of each of the functional areas of the organisation based on corporate objectives.(ensure that authority can be delegated without loss of coordination)

Relationship between corporate objectives and functional objectives:
--SURVIVAL:functional objectives are to assist the business to be survival(For example:choosing the appropriate stock in order to reduce the waste of the raw materials and it will increase the profit per unit)
--PROFIT MAXIMISATION:functional objectives will assist the business will its profit(increase capacity utilisation,makes the capacity efficient and reduce labour turnover and absenteeism)
--GROWTH MAXIMISATION:increase the share to increase the finance,and expand the market if necessary and more training programmers)
--DIVERSIFICATION:develop niche market to order to provide additional finance to overcome cash-flow problems and to achieve economics of scale(when there is a high output,the average cost per unit is lower)
FUNCTIONAL OBJECTIVES ARE MADE TO ENSURE THE CORPORATE OBJECTIVES ARE MET


SMART OBJECTIVES:
S--SPECIFIC:clearly defined
M--MEASURABLE:quantifiable(should have a certain number which the business are able to achieve)
A--AGREED(achievement):the managers and subordinates are involved into the targets
R--REALISTIC:the objectives should be realistic and no conflict with other objectives
T--TIME SCALE:which the business should have the time limitation

BUSINESS STRATEGICS
STRATEGY:the long-term or medium-term plans designed to achieve the objectives

RELATIONSHIP BETWEEN FUNCTIONAL OBJECTIVES AND STRATEGIES

HELLO!EVERYONE

Long time no see !!!I miss all of you so much .....xxxx
Any comment from new AS business studies and economics students is very welcome!!!!
It is the way to communicate each other and also an opportunity to improve my weakness hahaha!Anyway,I woke up ,going to continue my work!!!!

Pricing strategies and tactics

Pricing strategies:are used to reach market objectives
1.price skimming:is a strategy in which a high price is set to yield a high profit margin
2.penetration pricing:low prices are set to break into the market or to achieve sudden benefit in market share
3.price leadership:involves the large companies set a market price that all small firms should follow
4.price taking:involved small firms follow the price which set by a price leader.
5.loss leadership:set a very low price in order to encourage consumers to buy other products
6.psychological pricing:to give a impression of value
7.cost-plus pricing:price set is the average costs of a product plus a sum to ensure a profit

Formula revision in UNIT 2

Measuring profitability:
Two ways to measure profitability are the net profit margin and return on capital
1.net profit margin:
net profit before tax/sales

2.return on capital (invested):
net profit before tax/capital invested

Labour turnover: is the proportion of the employees leaving a business over a period of time
number leaving a business over a given period of time/average number employed over a period of time

Absenteeism:the rate of absenteeism is the proportion of employees not at work on a given day
number of staff absent on 1 day/total number of staff

Absenteeism rate for a year:
total number of days lost/total number of days that could be worked *number of staff

Unit costs:
total costs/units of output

Punctuality:
deliveries on time/total deliveries

Capacity utilisation:
actual output per annum/maximum possible output per annum

Cash flow Forecast-Budget Niche market!

So tired to do blog.....anyway I should resume my blog...exams coming soon...especially business,still painful....

Today I did the BUS mock,I thought it should be fine,but actually,it isn`t...I misunderstood the last part in question 1(9marks)

Today I am going to talk about the limitations of budget,cash flow forecast and niche market.

Cash flow forecasting disadvantages:
1.Mistakes can be made in both costs and revenue
2.Unexpected cost increase can lend to inaccuracies and misleading in forecasts
3.Wrong assumption ca be made in forecast,maybe poor market research,and it will also make the forecast inaccurate.

Budget disadvantages:
1.Allocations may be incorrect because the circumstances have changed
2.the both income and costs may increased unexpectedly it also makes the figures inaccurate.

niche market cons and pros:
pros:consumers are willing to pay a high price,has demanded price inelastic

cons:lack of economies of scale may make high costs.

EXTRA WORK 1：PED

PED:the responsiveness of the quantity demanded to a change in the price of the product.

Formula:%ch in quantity demanded/%ch in price

Notes:PED>1:ELASTIC;PED<1:inelastic:ped=1>

When the PED is elastic,if the producers drop the price,they will gain more,when they increase price,they will get a loss.


But when PED is inelastic,producers increase price,they gain more revenue,they loss profit when they decrease the price.


PED is one of the most efficient way to measure economy and market,and there are several important factors :

1.substitute:

Substitute,we can simply treat it as competitors,If a lots of producers produce the same kind o produce.Its quantity demand is elastic,the more substitutes,the bigger PED number are.Therefore,substitute is a main factor which can affect PED.

2. income level:

If there is an increasing in consumer income,the demand may increase,because people have more income than before,it may encourage people buy goods and services.But the problem is people may buy demerit goods,such as cigarette,which has negative efforts on the third parties,cause market failure,and in order to get more profit,producers may over produce demerit goods,make market failure even worse.At last,government may increase taxation to correct it closing to MSC

3.Time:

If there is a new product selling today,people may buy it,as it`s fresh goods,and want to try it.Demand may increase sharply,but....after a period of time,the demand for the product may decrease and keep remain..

4.Taste:

As I said in 3,time is a factor which might affect PED,taste is same as time,after a new product is introduced into market,people are eager to buy it,but different types of people have different tastes...after a period of time, demand for the product may decrease a lot,because of the different tastes.

5.Economics problems:

we know UK economy has deeply recession.People don`t want to expend,the demand for specific(people want but don`t need to buy)goods may decrease, because people may not need it for their normal life.So they don`t have to buy them when there is an recession.

ECO 18th Balance of payment

Balance of payment:a record of money flows coming in and going out of a country.



WHAT IN BALANCE OF PAYMENT?



1.trade in goods



2.trade in services



3.net flow investment income



4.transfer of money







Trade deficit:money going out is more that money coming in

Fashion laptop carry cases

This product is about the laptop carry cases,it is not a new product for us,but the point is it`s fashion and especially for female.It`s easy to understand why more product aimed to female,these product has different attraction points,as for this product,it has slight difference,separated into cold colours and warm colours.And different type of bags are for different size of the laptops.

Pink might be the most popular colour for female,as same as white...they are both attractive colours,it might attract female...

They also provide mini cases,which can just put a small size laptop into it,it might useful,because it is easy to carry,good advantage for females.

But I don`t think it is new attraction product....the reason...

Firstly,when you buy the laptop,you may get the laptop case for free,so people may not buy a new one for fashion.

Secondly,lots and lots producers have already realise this kind of market,it doesn`t make any big innovation about cases...people have more choices....

NEXT,as I know so far, some luxury brands has this kind of product as well,it makes this product has less competitive,people prefer to buy expensive,high quality,well known brands product.Even though your product is better,people won`t buy it....

Also, the price is not acceptable for mid-level income consumers,it`s a limitation.

Eco 17th Macroeconomic and TAX

Macroeconomic equilibrium:

TAXes:

The money which government use to improve health,education,and sort of problems is tax

Category of Tax:

direct TAX:tax which get from the percentage of people`s income and company and cannot avoid.

As we know, people and salary monthly,but they must pay income tax at the same time.This is one way where government get the money from in order to something else to improve specific section.In China the start point is 1600 yuan(160pound),but as your income increase your income TAX will increase as well....income TAX is the one of the main TAX government used to get money from,it plays a important role in government.

Also,company should pay direct TAX as well,it is the percentage of your company profit.Big company pay thousands and thousands TAX to the government.

indirect TAX:a tax levied on the goods and services

another essential TAX is indirect TAX,which we can see it everywhere.Whenever we go shopping and buy something we may noticed that there is VAT(value added tax)a part of the indirect TAX in the end of receipt,in UK is has reduced to 15%.In some luxury goods,such as cars,clothes...etc..government will higher the TAX for controlling.As for cigarette,UK government has higher the TAX,the tax is even more that cost.Furthermore according to the elasticity if higher the TAX on cigarette ,consumer will pay more(inclasticity) the reason why government do that is because it cause negative externality(which affect third parties)it is harmful for our normal life

But it`s not easy to control people not to smoke by using TAX on cigarette,because it`s inelasic even the TAX is high and price is increase,people are likely to buy it as normal.

Eco 17th

1.I put comment on first-time`s blog(It`s about house price)



2.David`s economics(the bank of England on deflation)

Deflation:a sustained fall in the general price level

Bad deflation:fall in aggregate demand may result in a harmful consequence.Lower aggregate demand will cause business firms to cut back production.It may cause unemployment ...Also might influence a country`s economy growth...

Good deflation:a fall in price level arising from cut costs of production to stimulate cosumers expending,supply will shift to the right,therefore more and more producers may have satisfying profit from deflation.Moreover productivity likely to rise as well....so we know that the output is growing.Country`s international competitiveness increase gradually.

3.Economics teacher`s blog:

ECO 16th

PPC(production possibility curve:show the maximum quantities of different combinations of output of two products
Opportunity cost:the next best alternative foregone
Elasticity:the extend to buyers and sellers respond to a market conditions
Unemployment:people are out of work but willing and able to work
Inflation:a sustained rise in the price level
Economic growth:an increase in real GDP,in the maximum output that the economy can produce
Exchange rate:the price of one currency in terms of another currency
fiscal policy:the taxation and government spending decisions of a government
monetary policy:decision on the interest rate the money sullpu and exchange rate
supply-side policy:policy to increase aggregate supply



AD:the total goods and service in period of time



AS :the total amount that producers in an economy willing and able to supply

Result...

I finally got AAU in 3 exams.....
I can`t believe I got U in business studies.....
nobody knew what did I review for business...except my mother...
But...everything has gone.....

Really should do something.....

McDonald's warns of revenue drop

McDonald's`s--one of my favorite fast-food brand,which I know big mac meal is 3.89 with large coke,large fries and a big mac burger.

Even though the whole world economy downturn,but MC does`t be affected that much.Because they have lower price and good market share and market size all over the world.

MC is elastic,it has more competitors, KFC is a good example,so if their price is lower than KFC,they will gain more.People are likely to buy cheaper goods during the crisis when the two fast-food companys produced same food.

But from the latest figure shows that there is 1.4% sales rise in FEB 2009 but compared with an increase of 11.7% in February 2008,it may tell us something.....

Experts said as the US currency is stronger and the commodity costs will squeeze its first-quarter,so we know there is a little rise in FEB 2009 but can`t compared with 2008...

After all,MC still is one of the famous brands is the world,we can image MC will do a good work during downturn when other brands have financial problems

ECO unit 1 review:YED

DEFINATION:the responsiveness of the demand for a product when a chenge in income



Formula:YED:%change in demand/%change in income

normal goods:have positive income elasticity

1. normal luxury:income elasticity is grerter than 1 YED>1


2. normal necessity:income elasticity is less than 1 YED<1

Inferior goods:have negative income elasticity

ECO review:tax ......demand

From the chart we can obviously see that when the demand for a product is elastic,and we draw the supply curve with tax.The supply price is higher(p1-p2),producers pay more,and quantity for this product is lower than before(q1-q2)


In this case,when the demand for the product is inelastic,supply price is higher with tax (p1-p2).Consumers pay more,and the quantity for this product is decreased,but not as same as when the demand is elastic.

ECO unit1 review:PED

Defination:the responsiveness of the demand for a product following the changing of the price.

PED=0(perfect inelastic)
It tells us whenever the price increase or decrease,the demand for this product doesn`t change.

PED=1 (perfect elastic)(unit elastic)

whenever the demand for a product change,the price of the product doesn`t change

PED:0-1 (inelastic)

From the chart we know if price increase(p3-p2),the retailers gain more....however,if the price fall(p2-p3),retailers lost more.

PED>1(elastic)
if the price increase(p3-p2) retailers lost more,price decrease(p2-p3) retailers gain more.

Formula:PED=%change in demand/%change in price

WHAT WILL AFFECT PED?

1. Any substitutes?
2. Period of time
3. Taste
4. Peak and off-peak demand
5. Income
6. Inflation
7. Economy growth
8. TAX

WHAT IF INCOME GOES UP?

the demand curve might shift to the right from d-d1,the price will increase from p0-p1.

EURO......same conclusion

The European Central Bank (ECB) has cut its key interest rate to 1.5% from 2.0%, the lowest since it started setting euro rates in January 1999.

As US and UK...Euro zone has also be affected by whole world economy crisis,as we can see from he chart,the interest rate of Euro zone has fallen down to 1.5%.It looks probably different from UK,but essentially,they are same....

1999,when Euro interest rate started setting to 2000,the interest rate has moved up from 2.5-4.5%,this situation might tell us that Euro is stronger that US dollar....Euros become more competitive.It has positive circumstance.

And from the start of the 2006 to end of the 2007 the interest rate had increase again...from 2-4%(SAME AS UK)

But from 2008-2009, it had jumped rapidly and incredibly....the economy crisis became more dangerous for a country`s economy...especially for capitalist countries and developed countries...

"Reduce interest rate"more and more countries which has been impacted by economy crisis and credit crunch is using this economy policy to help native economy and hope it will gradually recover ...but it`s not depends on the government, UK has published the policy before EURO ZONE,but it`s not efficient...more people are still waiting for what will happen next....

Fortunately,the economist said that such problems will be come over,moreover,the economy will recover and increase....

Canada 0.5%

Canada's central bank has cut its key interest rate from 1% to 0.5%, a record low.

Incredible......I even can`t believe it.Before I saw this news,I knew than UK economy has been impacted deeply,and in order to recover from economy crisis,and to encourage demand, government published more and more acceptable policy...one of those is to dercease the interest rate to 1%.

But Canada government published this policy,so what might happen in the future?

Demand:as the interest rate goes down to 1%,it is more likely to encourage consumers to expend more money on goods and services.Furthermore lower interest rate might also encourage people to take a short or long-loan to start a business(might not )or pay for the mortgage.In conslusion,the aggregate demand will shift to the right....

EXCHANGE RATE:the main key point---exchange rate, the related to the interest rate,if the interest rate goes down, the exchange rate might fall,therefore it is cheaper for the exporters and more expensive to the importers,it may have a balance of payment surplus(if other factors are equal,the GDP will increase???maybe ...we will talk about it later...)

I/X:as for the import and export.Firstly let`s think about import,because of the low interest rate,people are more likely to buy....but we don`t know whether it is made in China or someoneelse...

G.S:reducing interest rate also will affect the government spending to increase the financial support like subsidy to the small businesses,help car industry or nationalise the bank...(like Uk)

TAXATION:the VAT tax will fall ....encourage consumers...and tariffe,another kind of tax,might reduce...to fit for the demand...

SAVING:definitely will goes down...

AFTER ALL...let`s think about GDP?will it increase?

IF interest rate...fallen,

government spending increase(if others keep equal):GDP increase

consumption increase(if others kep equal):GDP increase

investment increase(.....):GDP increase

export>import(...):GDP increase

BUT!

IF interest rate ...fallen

the taxation decrease,government gain less from tax,the government spending decrease(...):GDP decrease

investment might not support the CAN`s economy because it`s risky,and can even get profit...

investment fallen(...):GDP decrease

HSBC announced 12bn share sale

Europe`s biggest bank-HSBC announced to have 12bn share sale

Why HSBC made this decision?

As the whole world economy downturn...some of the banks have suffered from it,and it`s prolonged problem.More banks found out more ways to solve it,such as got subsidy from the government,sold share to the government and may bought it back after the crisis or merge...

But in this case,HSBC asked to sale shares which might not happen in other banks .The reason is HSBC is Europe`s biggest bank,it has basic number of people who has account in HSBC which might deteminate HSBC made this decision.After HSBC start to sell its shares, more and more people might buy it rapidly and buy as much as they can afford,therefore HSBC can get more financial support and be in an positive circumstance.

Also,get more financial support means become competitive,therefore it has more possibility to resist suck economy crisis

So....it might be a good decision....

Northern Rock

Rock to revive mortgage lending.....
which might be a good news to UK economy.
In order to get extra money from the taxpayer,Rock has revived the mortgage lending.
Rock also published the 1.4bn loss for 2008.

Is it effective and efficient?we don`t know, but it is a part of the government policy
It might be a good news to consumers recovering from crisis especially,Northern Rock`s consumers.
But the treasury also need to provide an extra 10bn in taxpayer money to the bank...

ECO summary:exchange rate

EXCHANGE RATE:the value of a currency in terms of what it can buy of other currencies.

WHAT FACTORS MIGHT AFFECT EXCHANGE RATE?
-the price of /demand for imported goods and services
-the price of /demand for exported goods and services
-aggregate demand
-the growth of real income output in the short term
-the rate of inflation
-employment/unemployment

WHAT IF STERLING VALUE GOES DOWN?
-import price goes up
-consumer price index
-export does goes up
-strong AD -inflation

STRONG POUND?
-low import price,more import
-high export price,less export
-less inflation
-strong PPP

ECO summary：ECONOMIC GROWTH

Long term economic growth requires:



-increase productivity



-improvements in production technology







INCREASE AD:



-higher consumer expending



-increase government capital investment



-increase government spending in goods and services and reduce tax



-increase export



-reduce import expending







SUPPLY-SIDE:



-higher productivity



-increase input



increase labour supply



increase stock capital input



-technological advances



innovation and invention



reduce unit cost






higher AD and a rise in LRAS

short term changes in sras

RISING AD

ECO summary：balance of payment

what are included:
-trade in goods
-trade in services
-investment income from UK overseas assets
-transfer of money between people and government
trade goods -transfer of money =comprises the current account

actual GDP>potential GDP:positive output gap
actual GDP
AD:C+G+I+（X-M)

EXpenditure reduction:
-higher interest rate
-higher tax

Half time business homwork

Market mapping:selecting the key variables that differentiate the brands within a market and then plotting the position of each one

Market segmentation: analyse the market the identify different types of consumers

Brand positioning: The distinctive position that a brand adopts in its competitive environment to ensure that individuals in its target market can tell the brand apart from others.


Advertising elasticity:measures the extend to which change in ADspending affect demand (%change in demand /% change in ADspending)

Cash flow: the difference between incashflow and outcashflow

Loss leader:product sold at less than cost to attract consumer to a product range

Adverse variance: this is a change from a budgeted figure that leads to lower than expected profit

Net profit margin: net profit which is a percentage of the sales revenue

Organisation structure:the relationship between different people and functions within an organisation

Off the job training:away from the place of work

On the job training:learning by doing the job

Person specification:which kind of person the company will employ

Induction:is an introductory training programme designed to familiarise new recruits

Empowering employees:person who has the power to do the job

Job enrichment:is where the job is expanded vertically by giving the worker more responsibility

Job enlargement:expanding the number of tasks completed by an employee

Capacity utilisation:is the percentage of a firm`s total possible production level that is being reached

Rationalisation:reorganising resources to cut costs

Quality control:this is based on inspection of the product or a sample of products

Quality assurance:this is a system of agreeing and meeting quality standards at each stage of production to ensure consumer satisfaction

Productivity:output per person per a period of time

Product portfolio analysis:analysing the existing product mix to help develop a balanced range of goods and services

Price taker:a firm which sets its prices at the same or similar level to those of the dominant firm in the industry

Deep recession

"The governor of the Bank of England, Mervyn King, has warned that the UK is "in a deep recession" in 2009 and said rate cuts may no longer work"

The governor of the Bank of England ,MERVYN KING today said the UK is in a deep recession...
Which is a big hurt to UK businesses.....

In my opinion,it is a even worse news compared with interest rate declined to 1%....
From the chart we can see that 2009 is the worst year,because in this year output might touch the lowest point(-6%)...which means this year for UK economy is the most difficult year ever...

So,what will it impact business...
During the recession,some business might merge,because they strong company has more probability to keep alive...but it doesn`t fit for small businesses..some of the small businesses might bankrupt...therefore powerful company may merge small businesses as they want get benefit from it...for instance,they might consider that merge a small business might reduce their raw material or have good business idea and feature produts.

The structure of the organization might be recombined:they might have
-tall structure with a narrow span of control:the advantage of using this structure is subordinates might be more promotional...the productivity might increase

-flat structure with a wide span of control: the advantage are it will reduce overhead costs(total cost)and there will be more delegation and more responsibility it also is good for the company in such awful conditions

Even the unemployment rate is high,but I think it should be a good opportunity to big company,because they can employ some workers with low salary,so it also causes reducing total cost

Government support:In this situation,government may not help any of the small businesses,it`s risky,however the banks might be asked to sell shares to the government,it is a way government support the banks

Shareholders:shareholds might get loss ....

tourism:people may stay at home instead of going abroad....

X/M:import might expensive,export might cheap....

But the forcast said that this situation will recover from 2010....is it ture?....

Interest Rate:1%

Yesterday, Bank of England published the latest Interest Rate....cut 0.5% to 1%.

It reveals UK is suffering the deeply strike from RECESSION....

From the chart we can see that 1% is the lowest point ever since 1951.Interest Rate never below than 2%.But because of the recession,credit crunch,high rate of unemployment and economy crisis,UK economy become depressed...

That also affects consumers confidence.As credit crunch,people lose their confidence to borrow money,small business can`t get loan from the bank,some of them bankrupted for can`t can finance immediately....Big celebrated companies have to close a few of their multiple shops in order to reduce the fixed cost,and keep gain profit.Some of them,such as BMW,Starbucks reduce their workers to decrease the costs....

It is risky to bank to borrow money to some business firms ....

Now,the interest rate has fallen again to 1%,government want to increase consumer`s confidence,house price increase...people might gain confidence to UK economy..but not as much as before...VAT has decrease to 15% aims to want people take out the money from the bank,to expend...encourage people to buy in order to help UK economy...but now inflation is 3.3%,Which exceeded 2%.People can`t get confidence from the government policies....these policies are not really successful, people still looking on what will happen...

ECO short summary

GDP:gross domestic product
formula:GDP=I(investment)+C(consumption)+G(government spending)+(x(exprot)-m(import))
IF X>M:SURPLUS
M>X:DEFICIT

FACTOR COST=GDP at market price-indirect tax+subsidy
NET GDP=GDP-depreciation


HDI:human development index
-real GDP per capita at PPP
real GDP is norminal GDP after allowing for inflation

-education/literacy

-life expectancy

PPP:purchasing power parity

problems with the basket of goods:
-over a period of time the contents of the basket will change
-we must allow for weighting
the relative importance of a price change for different products

shame ON YOU!

This is Cambridge？University rank no.1 in UK？？？

Chinese PM speech AT cambridge

PODCAST

http://www.bbc.co.uk/radio/podcasts/bizdaily/

it is like a interview....talking about economic crisis...influenced to China,India...and other countries

China GDP has fallen down.....

Unemployment rate

This is the chart about china Unemployment rate from 2005-2008.The red line shows unemployment rate,and the green line shows the rate of the job which is absent

As we can see from 2005-2008 both of the lines are decreasing,but the key is red line above the green line.It may told us there are some people still waiting for a job.

But green line doesn`t change a lot.....(3%-2%)it`s like a straight line.Red line changes(6-3.9) and more and more close to green line(3-1.8%).

Also, we can have a look the UK`S unemployment rate from 2006-2008.

we can see that in 2007 is the lowest point about 5% and the highest point is in 2008...or after 2008,it`s alread touch 6.2% point which is a high rate of the unemployment....and the incredible news is unemployment people are nearly 3 million...amazing number....it might because of recession.....

Compared with two countries we can see,the unemployment rate in china is decreasing...to 3% let`s assume the population is 1.3billion 1.3*3%=3.9million and the population of UK is 60 million 60*6%=3.6million....it is a big difference....actually,China has more people don`t have job even the unemploymet rate is decreasing....as for UK, 3.6m is not a big number,but for UK is sufficient.....

which is better?!

Before......
Video games can influence on the human behaviour. Noawadays play male and female of different age, them interesting virtual life, because there thay can do what they want, no roles, no preasure from other peolpe And people become agressive after. For example female play Sims. The presence sexist stereotyping in games is hardly surprising. But it is influence on the state of mind, such as when you play you can do what you want but afterthis you want to try in the real life. There are many choices when people after game they went out and killed person or crushed something. At the real life for this you should pay, you can be arested.I think tha t after the playing games person can be change, because some of them can play all day, it is a drugs when yu try ones and cant life with out them. I think that should to influence to stop sell agressive games cwhich bring bad position. "





After I checked english mistakes and adjusted some sentences order
Video games can influence the peoples` behaviour . Nowadays, people like playing different genders in different ages in the video games,because they are addicted in virtual life and can do whatever they want without rules and pressures from other people And becoming more aggressive . For instance, girls are likely to play "Sims",the presence sexist stereotyping in games is hardly surprising,but it might influence the state of mind.When you play video games you can be whatever roles you want ,but after this you eager to try it in your real life. Here are many examples show people murdered someone else or broke up after playing game, they must be arrested and force to pay fund .I think playing games may change people personality, because some of them are happy to play video games all the days just sitting in front of the computer, it is like drugs, you can not give it up and control youself after merely try it once. I think government should intervene and ban selling aggressive video games which have negative externality. "

Personal inflation calculator

As a piece of homework,I found this advanced software"Personal Inflation Calculator"
A poor person,such as me...here is the result.We can see the differences..
My personal inflation :1%
Official inflation :1.6%
Which means Official inflation is more than my personal inflation

LET`S see median income people(my host mother)


And finally upper income people(BECKHAM)

The difference is 0.3%,it`s acceptable number...

pixar .....enjoy

Pixar is a strong company making cartoon...Its famous cartoon are "CARS" "FINDING NEMO",it`s quite famous...
1.lifted


2.the birds

Business article (M1)

I have read this business article:http://www.guardian.co.uk/business/2009/jan/03/small-business-government-loan-guarantee-scheme
It is about the difficulty to borrow money from the bank,also as the interest rate is rising thus the new entrepreneurs are worried to borrow money from the bank to establish the small business.
Another reason is government support.....It is hard to borrow from the bank if there is not government support
So,banks are not always being gentle to you.......are not always suit for you

Finally

Finally I finished the business exam.....what grade I could get? who knows...........but hopefully is a grade A..............

CHris Bus

MR chris,which your blog you want me to see????

And I have a advise to bus stop
To provide weekend bus ticket......bucause OXFORD is a international city.Full of foreigners especially international students........so student want to go to city centre for instance,they might go to city centre for shopping more than once and may go to pubs after that.....therefore they need to take buses for their main transportation.....so,the bus company should provide a weekend ticket....the price could be 6.5pounds(compare day-pass is 3.5pounds and 2days travel)I think it is likely to have more people,international student who study in university OR EF STUDENTS to buy it.......it is a good market.......also,the bus company should have cooperations with railways`company because people want to go to LONDON at the weekends ....and they need to take bus to get there .....
And bus company should give special route for example:bicester(is it right ??it is a town where sells luxury brands clothes in cheap price.........

what to do these days

3days to take business exam in Unit 1 ......A short plan .....

finish glossary and definitions

finish some real mock papers

.....bring black pen

1D 4D 8D

1D....tomorrow new study-term will start
4D....MATH c1 c2 exam
8D....business exam

.....I go back home
.....I take IELTS exam
.....I send application to university
..........