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Showing posts from December, 2020

What Are the Advantages of Stability Strategy?

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  In business, stability is a must. It is the key factor to make your business achieve its set goals. This is the reason why companies employ a stability plan in order for their set goals to be achieved. With this plan in place, it is assured that you will be able to keep your business running as efficiently as possible. And this is one of the main advantages of stability strategy. How does stability strategy work? It simply means if a company is still doing well even if it is following a turbulent market trend, then companies will not lose everything. The only thing they would lose is its customers. But with a stable company, they can easily adjust to any changes that might occur in the market especially its customers. Hence, a company's survival rate is higher than those companies who are not following a stability strategy. And this gives them a distinct edge and the advantages of stability strategy . Aside from stability, a company that uses a stability plan has a greater chance

Why Companies Adopt a Stability Strategy

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Reasons For Stability Strategy and its implementation are the reasons  why a joint venture strategy is so important. This is due to the fact that a company's value, the ability to earn profits, and market share will all increase over time. However, the stability of a firm also has a lot to do with its ability to weather various economic cycles. A stable firm with a good balance sheet will be able to withstand difficult times in the economic cycle. In addition, it will be able to maintain healthy growth and employment levels. Retrenchment can occur in almost any industry, though some are more susceptible than others. Companies in the oil and gas, iron and steel, metal fabricating, and food processing industries are more susceptible to retrenchment. A company with solid balance sheets will be able to weather these fluctuations and continue to make high-quality products. A company may also have reasons  for stability strategy  that focuses on cost control. A company may choose to cont

Understanding the Meaning of Stability Strategy

 The primary m eaning of stability strategy  is to make sure the company is both financially and organizationally sound over the long term. This strategy is usually initiated during the formation stages of a company or at the time of acquisition. The stability strategy can be designed to achieve a particular result, such as long-term gross profit or a certain number of shareholder's equity. The stability plan will be the backbone of a company's growth and its ability to continue growing for many years into the future. Developing a solid stability policy can also help to provide the necessary structure for a company as it embarks on an Initial Public Offering (IPO) or other capital structure proceedings. One of the most important factors that companies use to determine whether or not they are on the right track is a formal stability plan. This plan must lay out a vision and mission for the company as well as what will result if the company continues to flourish. Also, the compan

Constant returns to scale- Application In Business

In economics, returns on investment refer to what occurs after all inputs into the production process, including human capital use, are accounted for. The idea of returns on investment also arises in the case of a business's production function. It is a basic economic principle that a firm must continuously add new resources (raw material and labor) in order to reproduce its existing value added output, i.e., increase its net value. There is a key concept here: there is only a finality, a limit to growth, when a firm has exhausted all of its existing inputs. Beyond this limit, there are two possible scenarios: either the new or the existing value added output is equal to or exceeds the initial value added; or, the existing value added output is lower than the new value added output. In both cases, the outcome is the same: a marginal product is produced at a decreasing rate until the end of the process, at which point it is no longer feasible to produce any more. The concept behind

The Theory of Apportionment of Labor and Its Applications

  Cardinal utility theory is a modern theory of the relation between cost and utility. It postulates four factors in the category of utility and their relation to cost: factor 1 is their total value (utility) divided by their cost (cost of production multiplied by the number of units produced), factor 2 is their total price (price of the whole produced), factor 3 is their profit (how much the firm gains from its production), and factor 4 is their net present value (what amount does the firm need to gain from its production in order to sell its product at its retail price). In this article, we will explore the theoretical foundations of cardinal utility theory , namely the cardinal axiom. We will first consider the nature of cardinal axiom and then relate it to cardinal utility theory. The final part will summarize the results derived from this analysis. The first assumption of cardinal utility theory is that every good is consumed either in use or in generation. In other words, there i

Towards a View of Cardinal Utility Approach

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  The cardinal utility approach was first put forward in 1873 by Richard cardinal. The cardinal utility theory postulates a self-interest amongst individuals to choose what they value most. This means that if one person values something extremely highly, he will do all he can to get that thing and give up anything else that he does not value as much. This leads to the maxim "the pleasure of the Gainful" which states that people should work to gain the highest utility value out of the good or service they receive. The cardinal utility theory is therefore propounded by neo-Classical economists and is grounded on the assumption that utility or the satisfaction derived from consuming a good and service is measured and is expressed in absolute and/or quotient numbers. The cardinal utility approach has been criticized on several counts. One criticism is that it assumes that consumption is an action or task and as such it cannot be controlled or influenced. Another point of content

Understanding Features And Examples of Monopoly Market

 Whereas perfect competition is a market where companies don't have any market power, and they answer the market cost, a foreign exchange market is one without a rivalry in any way, and companies have complete market electricity.  In the event of a monopoly,  One firm produces all the output in a marketplace.  As a biography faces no substantial competition, it may charge any price that it wants.  Even though a monopoly meaning in economics describes one company, in practice, the term is frequently utilized to refer to a market where one company has a vast market share. However, there are not many real monopolies in life. Monopoly is thought to exist if one company is the only producer or vendor of a product with no close substitutes. First, there has to be one manufacturer or vendor of a commodity if there's a monopoly. This single manufacturer might be in the kind of an individual proprietor or a single partnership or a joint-stock company.  Whether many manufacturers create

The Define Monopoly in Economics

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The issue of how to define monopoly in economics is one that has preoccupied economists for years. In the United States, a serious discussion of monopoly power has been going on for more than 100 years. The basic issue is, what is the point of having a monopoly? If there are plenty of goods and services available to all, why is the level of competition so low? Monopoly in economics is one of those topics that has fascinated economists since Adam Smith's day. Smith's define monopoly in economics as, "A general inability to furnish the wants of people." This means that no single firm can provide the level of goods and services that consumers want and need. For Smith, then, the competition was not only a necessary but also a good thing. It ensures that goods and services are supplied at the lowest possible cost to the consumer. This is why there are criticisms of economists who adhere to the definition of monopoly as they believe that it leads to economic problems, such