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Question a: This business article gives an insight view of the economics play a key role for the companies

to define their strategies and how it is applied by various companies. This article has predominantly defining the principles of micro economics and its related equation for business students. According to the given article a lot of experts believe that the companies do not follow the delivery perception result in a major strategic drawback. Similarly, the economist believes that the competition could be a healthy approach to improve the market situation. However, there is strong like hood that this approach may face certain obstacles in the market. The Author believes that economics is one of the most useful forces for evaluating the strategy. This is due to the fact that economics focuses on the introduction and distribution of various sources. The above notion can be applied by organization in order to create and sustain profitability ofthe company in a broadest approach. In the line of the above fact most economists are supporting strategic decision because they believe that this approach can be useful for the companies to generate rate high turnover. On the other hand, the author believes that there is anxiety when it comes to handling out normative advice. In the given article the author highlighted various aspects of the advance economic research. On the basis of the above aspects the author concludes that there is no defined strategy for market economy. However, he believes that various companies should apply that strategy which is in the best interest of organizational growth. These strategies should be mainly focused on the market and products. The main reason the author suggest for different strategic approach is because there is high possibility try to imitate their strategy from other companies it might turn out to be a mistake. In the article it is experiential that in the language of economics the main concern of business policy researchers has not been stagnant profit maximization but profit seeking through communal entrepreneurship and with the pragmatic observation that mutual entrepreneurship is confidentially connected with the appearance and adjustment of unique and ecce ntric resources. If we say the economic models are not realistic, would be true but unfair and beside the point. This mismatch arises because policy researchers and economists have been interested in substantially different phenomena. The central concerns of the business policy are the observed heterogeneity of firms and the firm s choice of product-market commitments.

Question b(ii):What is Business model? Cite examples ,not necessarily from the text which illustrates the uses of such models.

The Business Model

To extract value from an innovation, a start-up (or any firm for that matter) needs an appropriate business model. Business models convert new technology to economic value.

the business model is planning for converting innovation to economic value for the business.the business model assumes a restricted environmental knowledge. finance. . However. where as strategy focuses on construction of a sustainable competitive advantage. marketing and strategy. shareholder value . whereas strategy depends on a more difficult analysis that requires more conviction in the knowledge of the environment.Role of the Business Model Technical Inputs Business Model Economic Outputs A business model draws attention on a huge amount of business subjects. 2. Creating value vs. including economics. Business Model vs. While the business model also tells how that value will be gained by the firm. For example. financing methods are not considered by the business model but nonetheless impact shareholder value. Strategy Some of the Researchers contrast the concept of the business model to that of strategy. The business model itself is an important determinant of the profits to be made from an improvement. Assumed knowledge levels . identifying the following three differences: 1. 3. entrepreneurship. the business model does not focus on delivering that business value to the shareholder. capturing value .the business model focus is on value creation. Business value vs. Introduction The Ansoff Growth matrix is a tool which will help businesses decide their product and market growth strategy.

There are many possible ways of approaching this strategy. Market development Market development is the name given to a growth strategy where the business objective is to seel its already existing products into new markets. this approach require a much more violent promotional campaign. including: . Market penetration seeks to get four main objectives: ‡ keep or increase the market share of current products ² this can be achieved by a combination of economical pricing strategies. It is dodgy. that this strategy will require much investment in new market research. Market penetration Market penetration is a growth strategy where the business will focus on selling active products into existing markets. advertising. ‡ Increase usage by existing customers ² for example by introducing loyalty schemes A market penetration marketing strategy is very much about ´business as usualµ. sales promotion and maybe more resources dedicated to personal selling ‡ Restructure a mature market by driving out competitors. They are described below.The output from the matrix is a chain of recommended growth strategies that locate the direction for the business strategy. therefore. It is possible to have good information on competitors and on customer needs. which is supported by a pricing strategy and which has been designed in such a way that it will make the market unattractive for competitors. The business will focus on markets and products it knows well.

Diversification Diversification is the name given to the growth strategy where a business markets new products in new markets. According to the author there is no best strategy because a strategy must be applied to a previously existing organization. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets. Instead. But. it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks. although best will be something different in each case. for example exporting the product to a new Location or in a new Country. . in the business industry not every company applies the same strategy as the one company strategy is differ from others and any one strategy is wrong in the perception of diverse companies. For a business to adopt a diversification strategy. market or product. In Sharon Oster article in 1982 the author illustrates that the companies if they would have adopted more efficient and new technology instead of the old technology they would have faced lower input cost. to adopt Different pricing policies so as to attract different customers or create new market segments by marketing its product. therefore. Rather than the strong financial entrants give the tough time to existing companies and where apples of strategy play a keen role from the managers. the strategy of create a barrier of new entrant could easily driven out of the market who has got weak financial strength. ‡ New product dimensions or packaging: for example ‡ New distribution channels. Product development Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets. Question b(iii): Explain Cookie Cutter Approach quoted by Scott Morton and why the author thinks that it will not work? The author thinks that the Cookie Cutter approach quoted by Scott Morton does not work because to find a successful strategy is difficult as it doesn t work with other features of the company. the strategy is not divorced from economic principles. However.‡ New geographical markets. those principles allow a manager accurately to tailor the strategy to fit his or her company. Furthermore.

. efficient markets. It must therefore. but to offer strategic recommendations to managers.And war among the companies in order to price or market share occurs with enduring to others. The short list of work highlights an important feature of economic research in strategy: principles are enduring and does not change with management fashions. This part of strategy has a tense relationship with an economics discipline that believes in differences between companies. be the case that some managers are making mistakes and need advice from an outsider on what is the right strategy. and a few wasted opportunities. but companies are unique and must apply those principles to discover the optimal strategy for them. the idea is not only to analyse how the world works. Strategy is unusually normative for a social science field.