Reflection Paper Essay Example | Topics and Well Written Essays - 750 words - 3

Reflection Paper - Essay Example It is known as industrial organization, and it makes managers have an understanding of how to make strategic decisions. Strategic decisions are those decisions that aim at changing a firm’s condition for which it competes with other firms. This is done to increase profit made by a firm in the long run. Managers must consider the economic cost of resources in order to achieve their profitability. The economic cost of resources is equivalent to the sum of what resource owners pay and the forgone returns of failing to take the resources of the owner to the market. In order for a firm to maximize its profits, the revenue and cost must not be dependent at all times. According to Thomas and Maurice, managers may make mistakes like increasing output to cut down average costs (13; ch.1) In the market, there are two groups of people: price setters and the price takers. The price takers are firms that cannot set prices in the market. To them, prices are set by demand and supply forces i n the market. Price setters, on the other hand, decide on the price for their products. Price setters control the market as they have the power to set prices. Market is where buyers and sellers exchange goods and services under an arrangement. The market helps in reduction of cost as the only cost involved is the product’s price. There are various market structures. ... Thirdly, there is the monopolistic perfect market that comprises many small firms, differentiated products and no barrier to entrance of new firms. The last form of structure is oligopoly; it is whereby firms produce all products, and their profits are not independent. The action of one firm may lead to a consequent effect on other firms. A recent structure is the globalized markets whereby markets in the world have been integrated. The integration has provided firms with a chance to sell and buy their goods and services in the foreign markets. Charles and Christopher presented an alarm on increased competition from other producers (23; ch.1) A review on Is Wal-Mart Good for America This movie gives a provocative scrutiny of the effect Wal-Mart had on America’s economy. This video highlights the transforming relationship between retailers and manufacturers demonstrated by Wal-Mart, which has led to bankruptcy firms in America and increased unemployment rate. As Wall-Mart suppo rters advertise the pros of low cost, others are shocked at what has led to low prices and the effect of large retailers on SMEs. From the Chapter Cne review in the video, it can be noted that this is one of the many mistakes that managers do hoping that they will make more profits. For instance, the global retailers overtake producers in decision making on product price, type and quality. Global retailers are superseding manufacturers in making decisions about product quality, type and price. There is no balanced trade as the Chinese are unable to buy American products while Americans buy theirs. To add to that, Wal-Mart has 6,000 suppliers, and China makes 80% of this. China has emerged