Attempt To Allocate Resources Effectively Economics Essay

Attempt To Allocate Resources Effectively frugals turn upThe paper discusses polar types of sparing systems like kindlyism, evidence miserliness, and former(a) sparing systems, assesses how each frugal system attempts to on the wholeocate resources in force(p)ly, explains the UK government policies ( that is to say m hotshottary, fiscal, social, and combative policies) and assesses the impact of all the above-menti unmatchabled policies on a chosen UK base system of rules. The paper describes commercialize structure types (namely, perfect competition, monopoly, monopolistic competition, and other grocery store structures. Finally, the paper explains the ways martplace structures define the out regularise and determine strategies of the companiesP4 Explain how frugal systems attempt to allocate resources impressivelyThroughout the history, the margin capitalism has been closely associated with other related nonions, including market capitalism, laissez-faire (pure capitalism), economic spaciousism, private enterprise etc (Kumar 1978). capitalist economy transformed feudalism in the Western valet de chambre, namely Britain, from where it had flourished byout atomic number 63 predetermining economic, cultural and political developments of the thence community. Later on, over the 19th and 20th centuries, capitalism formed the grounds of industrialization (Saunders 1995).Nevertheless, namely the ordinal atomic number 6 became crucial in the foundation of capitalism concept after the first economic school day was established in Britain. The school has produced much of the fundamental thought in the field of clearal political economy supported by the in worthy contributions of Adam Smith, David Ricardo, Jean-Baptiste Say, rump Stuart Mill and others, who thoroughly looked various ways goods were produced, distributed and exchanged under market conditions. Namely, those classical thoughts have set the foundations of the modern perc eption of capitalism (Slideshargon.net 2007). During 1930-s, illusion Maynard Keynes had a tremendous influence on the spirit of capitalism and the role of fiscal policy. The British economic expert emphasized on the important functions of monetary policy within economic policy. Keynes claimed that the economic mode finicky to the capitalist society could sustain its indefinite equilibrium even in spite of high unemployment. At that, during the 1930s Keynesian approach to economics assumed that laissez-faire capitalist economics was self-sufficient and did not need any intervention from a state to cut down unemployment or boost collect learn.Furthermore, Keynes suggested pump-priming approach to save the economy from recession in the period of economic down-turn, which involved cast up in government borrowing and spending as rise up as cutting-down taxes. In such(prenominal) a way, Keynes put forward his idea of cutting real wages through and through the system of their cr ack from the state and deterring from attribute money during inflation. This indicates that Keynes much favored state regulation as an effective tool to eliminate economic slowdown. Actually, Keynesian policies enabled the capitalism recovery afterwards the state of the Great Depression (Friedman 1970). The coetaneous academic question on the concept of capitalism is largely grounded on neoclassical economics and the relevant approaches developed by the Chicago School. The modern perception of capitalism therefore favors neutral government regulation and coordination of markets with the focus creative activity clothed on property rights maintenance deregulation of labor markets promotion of corporate governance by private owners development of transp arnt pecuniary systems with capital market-based financing in their core.Milton Friedman, known as a dedicated fol humiliate of Adam Smiths thinking, claimed that within the framework of free competition, social function become s an integral subroutine of dividing line activity. Herewith, Friedman showed that self-interest is able to benefit the contemporary society (Friedman, 1970).The study distinctive features of capitalist society were pointed out throughout the 20th century while experts compared and contrasted ascribable system with the centrally planned economic system. In collectable respect, capitalism has always enabled consumers with free superior, while producers were able to satisfy a consumer demand. By contrast, in the planned economies the carrefourion was entirely wangleled and directed by a hierarchically-led state policy. Thus, capitalism entirely has achieved sufficient saving of goods and function through the privatization of previously state-owned agent of production and infrastructural objects. In addition to this, the notion of capitalism is closely associated with the abolishment of subsidies and free trade wherein capitalist society is prone to perform ii rational a nd irrational actions that are often unpredictable. Namely the last 25 years of the previous century showed the increasing trend towards overall mobilization of capital and human resources. Globalization alone has opened a untried avenue for the development of both capitalist and non-capitalist models. Today, capitalism is attachmented by many an(prenominal) as world system featured by all the peculiarities of capitalist trade. Analysts state that such perception of capitalism dates patronize to the early 20th century imperialism. Following the same fashion, imperialistic policies emphasized on the promotion of laissez-faire(prenominal) normals of free trade among countries.Taking the abovementioned features of the contemporary capitalism into account, it is noteworthy that along with many positive effects globose capitalism has caused the state of global ine character reference in income rates, social security, access to strategical resources, and redistribution of world capital. In due respect, since the times of the Industrial Revolution there have been considerable changes boosted by economic growth in such areas as life expectancy, access to educational resources and information and communication technologies, literacy, babe mortality, child labor etc. By and large, global capitalist economy has been dramatically shifted by the device and fast application of telecommunications within the last thirty years. Information and communication technologies (ICT) have enabled virtually of the business transactions in virtually any part of the globe (Evans 1997). all overall, capitalism promotes economic growth and social standard of living measured by GDP. According to Adam Smith, free market alone allocates infallible resources and controls production and harm, which is particular to the contemporary world capitalist system.Furthermore, capitalist economy, if compared to conventional economic systems and feudal or socialist societies, provides vas t opportunities to raise individual income while engaging in late professions or found private business ventures, for example. As Milton Friedman puts it, competitive capitalism leads to economic freedom and subsequently to the political one where there is no place for the centralized control of economic activity or political repression from the state. Conversely, the innovation of market economy transactions causes dewy-eyed diversity of activities and/or their free choice. In unity with John Maynard Keynes and Friedrich Hayek, capitalism is a reflection of economic freedom which is essential for social survival and development (Bellamy 2003).Thus, many capitalism supporters claim that namely the decentralized system of coordination is the most powerful feature of capitalism. Particularly, the decentralization of economic helpes leads to free competition and optimal solutions to the arising challenges. Even the slightest control from then state, according to the Austrian Scho ol thinkers, green goddess potentially cause serious inefficiencies since economy then becomes unpredictable in the long-term perspective. One of the major causes of the Great Depression, for instance, was the immense interventionist policy led by the Federal Reserve. Today we understand capitalism as an economic system that assumes private ownership and control of wealth and the means of its production. In due respect, state ownership bears limited relation to the essence of capitalism.Both private individuals (entrepreneurs) and companies (corporations and small and medium-sized enterprises) own, operate, and trade capital and labor, as well as other resources for the sake of profit-making. In the contemporary conditions, capitalism is an indispensable lot of market economy which entirely excludes any government intervention in the transactions that involve investments, income, production, distribution, cost and preservey of goods and operate etc. Furthermore, labor as such is a distinguishing feature that characterizes capitalism in the contemporary conditions of fierce competition. Based on appropriate knowledge and skills, human resources are viewed as the most valuable asset by the majority of employers. Herewith, market rules make up a regulatory framework that determines economic developments in the contemporary capitalist state.In most instances, the role of a state is limited to the preparedness of relevant infrastructure and public goods. This indicates that economic developments are predominantly grounded on the so-called laissez-faire principle envisaging a minimum state intervention into the economy. Consequently, the contemporary notion of capitalism highlights the ultimate importance of the control over the means of production by private owners wherein the state role is mainly limited to the fortress of property rights. However, such conclusion would be correct only from the pure capitalism viewpoint.By and large, the well-developed conte mporary economies present a mixture of public and private ownership and therefore are reasonably referred to as the capitalist mixed economies, where both private capital and state serve their particular roles. In its essence, classic political economyhas is closely interconnected with classic liberal doctrinethat reduces governments economicinterventionto the minimum. At that, economic and social realms were clearly distinguished, wherein state could provide necessary public goods and work (Lane and Ersson 2002). The phenomenon of globalization is comfortably changing national economies. In many countries the transitive process from monopolistic regulation to the market economy principles requires much time and effort.P5 Assess the impact of fiscal and monetary policy on business organizations and their activitiesThis plane section explainsthe UK government policies (namely monetary, fiscal, social, and competitive policies) and assesses the impact of all the above-mentioned pol icies on a chosen UK based organization. Economic globalization from below is empirically implemented through transnational flows of investment and financial capital as well as transnational production and values networks. oerall, neo-liberal convergence assumes simple macroeconomic policies primarily focussed on tight fiscal policies, monetary stability, trade liberalization, privatization, as well as liberalization of the house servant help capital and financial system.The patterns of neo-liberal convergence grounded on Anglo-American capitalism assume leaden interaction between government, banks and businesses, independence of central bank, equity financing of corporate sector, and untroubled berths of bond and stock markets. In accordance with the liberal globalization theory, the nation states are constraint from below as a result of transnational economic globalization. Trans-nationalization of production and services as well as the extended capital mobility intensify t he market forces insistence on the national state policies and government authority regarding budget and account remnant, as well as fiscal and financial policies, labor standards, investment regulations, and governance. Ohmae claims that the globalised world economy is featured by the increasing mobility in(1) Investment flows through capital markets(2) Industry developments through the operations of transnational corporations(3) Information technology advances and at long last(4) Individual consumers (Ohmae 1995).In macroeconomic terms, the US recession in 2008 produced a modest aversive proceed on UKs real GDP growth. Under the conditions of global economic growth slowdown, some countries (China, Australia and Sweden) have tightened their monetary/fiscal policies aiming to prevent inflation. Conversely, the United Kingdom has eased their monetary policies while reacting to the weakening economic growth. The domestic fiscal policies were aimed at the correlation of supply and demand, while the Government has managed coition inflation, interest rate differentials, admit economic growth, deficits and debt as well as the countrys export competitiveness.The National Bank has managed to sustain a strong and highly-competitive exchange rate of the national currency compared to other major currencies. To attain this, the domestic fiscal policies were aimed at the correlation of supply and demand, while the Government has managed relative inflation, interest rate differentials, moderate economic growth, deficits and debt as well as the countrys export competitiveness. The government assigns various policies to achieve both internal and external balance goals. According to the Mundells framework of effective market classification, the authorities assign their policy instruments to obtain the greatest relative impact.Consequently, the net costs of the balance of payments will be eliminated. Simultaneously, fiscal and monetary policies are used to prosper output . On the other hand, according to the Keynes assumptions claiming that fiscal policy is more direct and is featured by less time lags, fiscal policy has the greatest relative impact on the brand and monetary policy and their effects on the balance of payments.Herewith, external balance is impacted by the increase in exports caused by non-domestic policies. In particular, faster growth afield leads to the higher exports of the UK goods and services. Relative advancement in the UK competitiveness is due to the rise of relative international price as well as the appreciation in foreign exchange rates. The analysis of the relevance of Keynesian policy options to the todays UK economy suggests that the implementation of the Expenditure Changing indemnity (ECP) is possible by means of re-inflation/deflation through fiscal, monetary, and exchange rate policies. Prior to such implementation, however, it is vital to critically assess internal economic position of the UK. Alternatively, the application of Expenditure Switching Policy (ESP) is possible through such policy means as devaluation or revaluation. The implementation of ESP is possible outside the obstinate exchange rate system and therefore not within the European Monetary Union.Finally, the implementation of depend Controls (DC) is possible through tariffs, non- tariff barriers, and exchange controls. However, direct controls are abandoned by the mainstream policymakers considering the WTO trends as well as the free trade orthodoxy (Krugman and Obstfeld 2009). A holistic view of economy should be developed to stop internal and external balance policies. Loan-financed domestic investment programs should be vastly apply as the means to raise the level of unemployment within the British economy. Pump-priming approach should be applied to safeguard the countrys economy from the recession. This involves cutting-down taxes and the increase in government borrowing and spending. Real wages should be cut thr ough the state control and deterrent from holding money over the inflation.The economic stabilization should be achieved through the strong position on unemployment decrease, interest rates rise, and management of internal and external currency. State regulation is the most effective means to prevent further economic slowdown for the UK economy. Ryanair is currently positioned as the Europes largest low cartes airline. Ryanair is well-acknowledged brand wide and far as the worlds reputable and favoured airline which holds 37 bases and offers over 950 low-fare routes in 26 world countries. Strategically, the gild connects some 150 destinations. The fraternitys powerful fleet consists of 210 Boeing 737-800 aircrafts which number will increase in the foreseeable succeeding(a) (2-3 years) up to some 315 aircrafts (Ryanair 2012).All these and other staggering achievements and successes have become possible due to the effective marketing of services, as well as smart and loyal HR pol icies effectively applied by the corporate management which currently sustains and leads the impressive number of staff that exceeds 7,000 employees. Such internal competitive profit enables the connection to build up huge plans for the external operations. In 2012 fiscal year, the go with intends to penetrate up to 66 m. passengers internationally. In 2011, Ryanairs showed 15% growth and pureeed 59m passengers. To sustain this positive tendency, the companionships management has already arranged to deliver 18 impertinently aircrafts and therefore increase its fleet capacity up to 181 Boeing 737-800 NG aircrafts. The company is due to open four new bases in Europe (including Bologna, Alghero, Edinburgh, and Cagliari), as well as to launch 223 new routes (Ryanair, 2012).P6 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organizationOverthe years of successful operation, Ryanair has established a strong and recognizable brand that enabled it to win a repute of the company that loyally provides the passengers with the lowest air traffic fares. Hence, in marketing terms, the company has placed its major strategic focus on offering unbeatable prices and punctuality (Ryan Passenger Service Charter 2009). The overall corporate commitment therefore is concentrated on responsive air services and incomparable pricing options. This has made the company the number one international provider of low-cost air services. The companys main product (air services) is successful among its point markets due to the reasonably charged price.However, another core factor is the promotion of the companys services on the international markets. Herewith, statistics on the Ryanairs successful operations and its successful performance over the last two decades indicate that the company has smartly and effectively applied marketing mix to synergize its product offerings and win target markets internationally. The corporate mar keting strategy with the marketing mix in its core helps the company to identify and critically evaluate its business opportunities, ameliorate concentrate on the core target markets, implement market segmentation, and consume relevant marketing research on each stage of its operation. Ryanair marketing department considers the air services it provides in terms of seasonal demand affordability economics and branding. The dynamic pricing for the offered air services is careful with the friendship of such strategic issues as(1) Cost asset value added cost which is proportionally lower than those of competitors(2) Price fluctuations with regard to the current demand as well as(3) Optional seasonal discounts. Finally, namely owing to the promotional campaigns, Ryanair raises customer awareness while conveying its target messages via various media channels.This approach enables the company to explicitly identify its target markets and subsequently win them over from the companys m ain rivals. Most importantly, effective promotional strategy enabled Ryanair to make the brand recognizable and wanted among target markets. Thus, one of the main external competitive advantages consists in establishing a positive public opinion on the companys product (Kotler and Keller, 2005). The companys marketing mix involves the future(a) strategic parts(1) The lowest affordable prices to all the passengers within all the routes operated by the company heedless of the current competition on such routes(2) Ryanair applies the fare guarantee known as Double the Difference to see that in case a passenger finds a lower rate provided by any of the companys competitors, the company repays the passenger with a double fare difference between the differing ticket prices providing such a passenger grants to books a travel with Ryanair.Hence, Ryanair vouchs passenger convenience by claiming that its passengers are always provided with the lowest fares on operational the market fo r their journeys providing they book Ryanair services via corporate webpage www.Ryanair.com.Furthermore, in terms of open and comprehensive customer-oriented communication, Ryanair always ensures its passengers are well-informed about the applied terms and conditions with regard to the individually chosen fares (including, applicable fees, charges and taxes). The company ensures that passengers are always saved from any price increase and fuel surcharges. Furthermore, all Ryanairs passengers are guaranteed with immediate notifications with regard to any possible force-majeure circumstances, including cancellations, postponements, delays, diversions etc (Ryanair 2010). tour effectively marketing its services, Ryanair is fully aware of social corporate responsibility before its stakeholders, staff, customers and environment. As the Europes largest low fares airline, Ryanair has achieved a steady growth in a sustainable and environmentally-friendly manner. Over the last decade, the co mpany has made an enormous investment in the cutting-edge engine and aircraft technologies to reduce its carbon dioxide emissions almost by half as well as the burnt fuel. Over 1998-2008, the company applied eco-friendly policies based on smart and effective commercial and operational decision-making approaches to eliminate the environmental impacts.Hence, the company is withal highly- reputable with regard to the environmental efficiency. In 1999, Ryanair invested 17bn to advance its fleet replacement and expansion programme. As a result, 11Boeing 737-200 aircraft was substituted by Boeing 737-800,referred to as the contiguous aircraft generation. Such strategic step enabled Ryanair to position itself as the European youngest and most fuel-efficient aircraft fleet. The competitive and comparable advantage is that the company operates the youngest, safest, and most environmentally sustainable aircraft fleet in Europe (Ryanair 2009). Owing to the strong competitive advantages and smart service marketing, Ryanair managed to overcome numerous challenges posed by the global economic crisis and adverse affects of recession. More than that, Ryanair managed to increase its market share over the recent period of economic meltdown and recession.P7 Explain how market structures determine the pricing and output decisions of businessesCompetitive companies vastly apply marketing mix to combine product offerings to reach target markets. At that, product refers to physical products and services offered and provided on the marketplace. It is crucial to define right features of any product/service to make it successful, and therefore each instalment makes sense for the Banks sales success. As well as this, product/service means good quality and warranty, as well as a customers legal right to return it back to the selling organization in case of its incompliance to the initial customers requirements or/and expectations. Secondly, price is a sum of money ( measurement) paid for the product. Thirdly, place means the right location of a product, and that is why place also stands for distribution channel, including physical stores (supermarket) or/and Internet sites like e-Bay. Finally, promotion, as was already indicated, presents the most complicated and therefore important elements of marketing mix. This component is not only physical but predominantly psychological to impact customers decisions. Overall, promotion includes the whole manikin of communications managed by a marketer may within the marketplace. Huge part of it belongs to media advertising and other means of mass influence (Lauterborn 1990).Herewith, along with identification of business opportunities, selection of target market, market segmentation, and market research marketing mix represents a part of a companys marketing strategy. At that, product component should consider product life cycle, design (aesthetics), function, economics, environmental impact, packaging, branding. In tur n, price is based on the one of the following pricing strategies cost plus (addition of value added cost) price skimming (charging high initial price in order to recoup the development costs) premium pricing (the price is set out by the high-quality brand) dynamic pricing (constant change of prices depending on current demand) and discriminatory pricing (different prices (discounts) are charged to different customers for the same product).And finally promotion, which is generally aimed at raising customers awareness by conveying the message through media channels and identifying target market. At that, advertising methods may vary, including sales promotion to support marketing process by applying free samples, competitions, gift coupons, trade promotions and other devices and public relations, including establishing and maintaining sound public opinion regarding the product.Ryanair is a perspective player on the European air market that will further win new destinations and custome rs through the effective marketing and supplying customer-oriented services. Making up the marketing summary of Ryanair operation, most experts agree that the price has been always a decisive factor in customers choice among airlines. Ryanair managed to offer its passengers the lowest fare in Europe. Furthermore, this not solely lowest cost that attracts customers, but the whole range of convenient customer-oriented services that are rendered in effective, responsive and punctual manner. Next, compared to other European air carriers, the company gained a comparative advantage by having reduced oil cost.The companys aircraft capacity consisting of new generation Boeings as well as operation of new airports and bases enables to serve more than 100 million passengers a year. Continuous lead customer service in the industry combined with the falling oil charges and air fares altogether enabled Ryanair to prosper regardless of the global economic crisis and gain profits from its internat ional operations. Therefore, there is all evidence to state that the company is sure to double its profits and traffic capacity by the end of 2012.Apparently, in the data track of the next few years Ryanair will become the biggest and most demanded airline in Europe. In terms of service marketing, the company should further promote its well- established marketing mix concept. Furthermore, the companys leadership should add more proficient options to make the customer services faster and more convenient. Such approach will help the company to penetrate new destinations and win larger market shares as well as target markets in the future. Ryanairs strategic attitude is designated by appropriate pricing techniques.Ryanairs strategic positioning is determined by the choice of appropriate pricing techniques. While emphasizing on high quality of its products, effective promotion and sound advertising, as well as value for money, the company applies competitive pricing strategy to ensur e that the familiarised prices do not exceed those of the competitors (Kotler and Keller 2005). This strategic choice is reasonable and justified since regardless of individual savor preferences or any other essential factors, consumers regard product value as one of the most decisive factors while making their purchasing decisions. Therefore, Ryanair cannot apply skimming pricing technique in the course of designing and launching a new product. This technique can be applied under the conditions of nonresilient demand (Boone and Kurtz 1992).In addition to the effectively applied competitive pricing strategy, Ryanair focuses on cost plus pricing which helps the company to maximize it profits. While accurately accounting all its costs, Ryanair reaches optimal supply and demand balance and well-balanced positioning on the market compared to its competitors. Alternatively, Ryanair applies positioning pricing to set up the prices with the consideration of demand-side concerns. Through polling and surveying its target markets, Ryanairs experts designate the optimal price range that would satisfy the majority of the consumers. This positioning technique is particularly applied to better sell Ryanairs services.Optimal trading also depends on the financial capacity of the demand-side. Therefore, Ryanair applies demand-based pricing to critically assess the purchasing power of the majority of its consumers. Only under such conditions the company is able to trade its services in accordance with the strategically planned volumes. Hence, selling at the customers price brings Ryanair profits, good reputation and positive feedback from the majority of its customers.Ryanair should develop new services and promote them domestically as well as internationally. Such service/market growth approach will ensure that the company has diversified range of products which are available and well-recognizable in many countries of the world (Ansoff 1965). Such strategic choice will provi de the company with enormous comparative advantages over its competitors and will help it to better cope with the hurdles of the global economic crisis.However, considering the challenges of the global competitive markets, this strategy will not be suitable any longer. Hence Ryanair should transform it into more powerful and innovative global image.The variety of new high-quality and reasonably-priced services will add value to the business activity of Ryanair and will win new overseas markets for the company. This task would require the company to carefully design and develop innovative brands of its services which are not yet present on any of the foreign markets, and which will be potentially demanded by the consumers (Ansoff, 1957).While developing innovative products and penetrating overseas markets, Ryanair should initially consider the demand-side of its target markets. Among the most important criteria are the following(1) Average income(2) Average spending amount on one-tim e supermarket/store purchasing(2) Average amount consumers are ready to spend on air services(3) PESTLE analysis of the target market with the consideration of the adverse affects caused by the global economic meltdown and(4) Porter analysis of the targeted market.Such wide coverage of strategic issues will win Ryanair competitive advantage and increase its share on the foreign markets.Ryanairs choice of the optimal marketing strategy should consider their chances of success in terms of market diversification. To reach optimal market diversification, the company should ensure that its new product adheres to the customers needs and preferences. Extensive market research will help Ryanair to explicitly identify its potential target markets for new services. Herewith, Ryanairs marketers should consider the following strategic factors(1) Financial health of the targeted market(2) Purchasing capacity of target market(3) National and individual preferences of target market(4) Previous exp eriences of target market in terms of purchasing the same services provided by competitor companies(5) SWOT analysis in each individual case will ensure that Ryanair eliminates all the possible constraints to the minimum and transforms the threats into potential opportunities.Realistic and achievable strategic objectives should be set in accordance with the SMART approach whic