Case Discussion Questions:

1. What are the implications of the informal economy for firms that operate only in the formal
economy?
Both firms in formal and informal economy work together day to day in business activities,
however formal is more dependent. In a formal economy the firms have a formal contract with
its specialists, about pay, motivation arrangements and retirement benefits scribbled down.
There are work conditions conjointly that are invested with work duties and desires which
motivates them to accomplish what is anticipated out of them.
2. When firms consider analyzing their competition should they include firms in the informal
economy? Please explain why or why not
Yes, they should try and incorporate firms within the casual economy since they are small credit
businesses, serve littler clients, and are in markets with low passage costs.
3. What opportunities does the informal economy present to firms operating in the formal
economy?
In an informal economy that are “dreamt”, selling items you usually buy legally in a regularly
business but cheaper, having a cost advantage. Informal gives an opportunity and tries
understanding customers needs, when formal economy can not satisfy customer, informal find
better a way to meet their needs.
4. What threats does the informal economy present to firms operating in the formal economy?
One threat is that informal business has an advantage when competing against formal economy
business in the firm they don't pay taxes or incur the costs of regulations.
5. How do firms operating in the formal economy identify and analyze the parts of the informal
economy relevant to their strategies?
Usually firms prepare and design strategies, as part of their business. When analyzing issues,
they consider economy level, incomes levels, competition, product/serves, and growth aspects.
Businesses can plan well to capture their marketers with those who are focus on formal
economy.