Farhana, C. (2015). Geant offers a world of choices to customers: Hypermarket chain is celebrating its 10th anniversary with promotions. Khaleej Times. Web.
Geant, the leading hypermarket chain in the United Arab Emirates, has promised its customers a unique experience starting May 14 to May 30. Within this period, this firm will offer its customers a wide variety of products to choose from whenever they visit this retail store. The firm has promised to offer its customers the best prices within this period. Shoppers who spend more Dh 200 also get to win unique prices. The following economic concepts come out of this report.
People respond to incentives: People will always respond to incentives, and that is why Geant has made the initiative to come up with this program that is meant to run for about 16 days. This firm knows that people will be attracted to a number of incentives it offers, especially the prizes and reduced product prices.
Comparative advantage: This program was meant to give Geant a comparative advantage over its market rivals. Being the market leader, it has the financial strength to offer the incentives it has promised its customers. This gives it a competitive advantage over its market rivals within this region.
Demand curve: a change in the price of the good itself: The story presented in this article demonstrates that there will be a change in the demand curve. Geant has promised its customers reduced prices on various products they will purchase. This means that the buying capacity of the customers will be relatively high compared to what they could purchase prior to this offer. This will motivate them to buy more products.
Sandhya, D. (2015). Dubai Plans Smart Car Rental model to increase public transport use. Khaleej Times. Web.
This article presents a report about an initiative by the Roads and Transport Authority. RTA has a car rental program for its customers in the city of Dubai. The travelers can now hire cars instead of waiting for the buses and trains. The main advantage of these cars is that they are more convenient than the buses and trains. The following economic principles are clearly presented in this article.
Opportunity Cost: This new product offered to the customers of RTA will mean that there will be a foregone opportunity. All the customers that have been relying on the buses and trains must be ready to forego the low prices of these two means of transport in order to get a more efficient means of transport.
Specialization can make everyone better off: RTA has specialized in the transport sector within the United Arab Emirates. It is evident that this specialization has made it a better firm in terms of offering quality to its clients. Through a thorough market research, it realized that its customers needed efficiency when moving from one place to another. This new product offers a better service to its clients.
Monopolistic competition: The transport sector in Dubai can be described as monopolistic competition. The government has not stopped the private firms from operating in this industry. However, RTA has over 75% of the market share. With the introduction of car rental services, this market share is expected to increase to over 95% of the market share.
Cronin, S. (2015). Jumeirah Golf Estates to develop mid-market homes around Race to Dubai course. The National. Web.
Jumeirah Golf Estates is planning to develop homes in Dubai which target the middle class. The firm will build 625 homes well equipped with all the amenities that the residents may need. This will help in addressing the housing problem that is looming in the city. The following economic concepts are captured in this article.
Supply curve: changes in the use of technology: When technology is used in the production process, then the supply chain curve will be affected. The project is using state-of-the-art technology in the construction of these new houses in Dubai. The use of technology means that the products will be made available in the market within a very short period of time.
Supply curve: a change in the price of the good itself: The fact that these houses are constructed using modern technologies means that the cost of production is low. This makes it possible to charge low prices on these products. Those who want homes can get them at a price as cheap as Dh 597,000. This is a relatively low price compared to what other firms are offering in the market.
Sahoo, S. (2015). Legoland and Bollywood theme parks to spark new developments when the Dubai project opens. The National. Web.
The construction of Dubai Resorts’ theme parks is expected to attract more tourists to Jabel Ali and other surrounding regions. The new project is expected to increase the size of the car parks, hotels, and restaurants for local and international tourists.
Supply curve: changes in the number of sellers: The introduction of the new retail units at the park is meant to introduce sellers in the market. This will have a direct impact on the supply curve because of the increased amount of products in the market. The increased level of competition may force the existing players to lower their prices or improve the quality of their products in order to remain competitive.
Demand curve: a change in the price of related goods: complements: It would be expected that the increase in the number of sellers will lower the demand for the products. However, the demand is expected to increase due to the introduction of more parking areas. Most of the shoppers prefer areas where they can park their cars, making the parking areas to be considered complementary products. This will motivate consumers to visit these stores.
Demand curve: a change in buyers’ expectations: The new project brings with it a unique experience, and this will increase the expectations of the customers. Many visitors will come to these stores in order to experience the value offered by the new facility. This will translate into increased demand.
Randhawa, M. (2015). ISIL attack will not divide the Gulf peoples. The Nation. Web.
This article focuses on the activities of the ISIL and its impacts on society. This terror group has been sowing a seed of discord between the Shia and Sunni Muslims in the Middle East. The ongoing propaganda by the ISIL is meant to destabilize this region in a way that will only benefit this terror group. The following economic principles come out from this article.
Governments can sometimes improve market outcomes: Government intervention may sometimes be necessary to help in improving market outcomes. As shown in this case, the activities of ISIL is causing insecurity, making it difficult to conduct business activities within the region. The Saudi Arabian government has intervened in order to restore sanity and promote an environment that is friendly to the business fraternity.
Demand curve: a change in income: normal good: The ongoing war in parts of the Middle East has rendered many people jobless. People are forced to stay indoors because of the threat posed by ISIL. This means that they do not have stable income. Change in income changes the demand curve. They may be willing to buy products, but they lack the financial capacity to do so.
Supply curve: a change in input prices: The war is making it difficult for many companies to get the right inputs for their productions. The price of the inputs has gone up, forcing some firms to consider halting their operations for a while. This means that the supply of the products in the market has reduced.
Asmaa, H. (2015). Fatima Bint Mohammed on her quest to keep Emirati cuisine alive. The National. Web.
This article presents a story about Fatima who decided to use her cooking skills to start a business. Her Emirati cuisine has become very popular in Khalifa City. The following economic principles are evident in this story.
Markets are usually a good way to organize economic activity: The story of Fatima clearly demonstrates that markets offer a perfect opportunity to organize economic activities in our society. Fatima had a talent in preparing Emirati cuisines. However, it did not bring her any income until she decided to take it to the market as an economic activity.
Market equilibrium: Fatima realizes that food market in this city had not reached equilibrium. The demand was not fully met by the current supply of products. Her move to introduce unique food products helped in achieving market equilibrium, as shown in the figure below.
Statt, N. (2015). Microsoft’s Windows app stores are still ‘cesspool’ of copyright infringement. CNET Gulf News. Web.
Microsoft windows app stores are plagued by accusation of copyright infringement despite its growing popularity in the global market. The new software also enables the users to illegally stream movies, a claim that has put to question the integrity of this firm. The following economic principles are well presented in this article.
Market failure: Governments are sometimes forced to intervene in order to restore normalcy in the market when there is a market failure. In this case, the actions of Microsoft will force relevant governments to take actions to restore normalcy. It shows that the market has failed to regulate itself, forcing the governments to intercede.
Importance of property rights: It is important for any business entity to respect copyright of other firms in order to have sanity in the market. Microsoft has breached the copyright laws by introducing new products which allow its customers to illegally access the materials of other firms. The architectural designs of software closely resemble that of other firms, further complicating the copyright issue.
Free-rider problem: Microsoft’s case presents the free-rider problem in the best way possible. This firm wants to benefit from the products that belong to other firms. This affects the firms that spent a lot of money to create these products. The free-rider problem is always undesirable and may sometimes require the intervention of the government through enactment and implementation of copyright laws.
Statt, N. (2015). Microsoft tried to buy Sales force for $55 B. CNET Gulf News. Web.
Microsoft has moved closer to buying Sales force for $55 billion, a move that will make it control over 60% of the world’s software market. Microsoft has been keen on diversifying its products and this move demonstrates that it is still determined to strengthen its position as the market leader. The following concepts can be seen in this article.
Absolute advantage: Firms are always keen to achieve absolute advantage in order to increase their competitiveness in the market. Microsoft is doing this by acquiring firms with superior products and production technologies such as Sales force. Through this, it seeks to gain an absolute advantage over its market rivals in the global market.
Profit maximization in a competitive firm: The story in this article shows that Microsoft is keen on maximizing its profits by increasing the sale of its products. By acquiring Salesforce, it will have increased sales which will translate into increased profitability in the market.
Monopoly: It may not be easy for Microsoft to achieve monopoly in the market of software. However, by acquiring market rivals reduces the level of competition in the market. This allows the firm to operate in a near monopolistic market.
Debusmann, B. (2015). Greed is very bad for business. Khaleej Times. Web.
Greedy chief executive officers consider taking risks that only have short-term benefits. Such chief executives ignore the long-term dangers their actions may have on the firm. The following concepts come out clearly in this article.
Rational people think at the margin: As presented in the future, greedy chief executives fail to think marginally because they are not rational in their decisions. They fail to realize that the future is just as important as present. Their decisions are meant to bring short-term benefits, ignoring the importance of future sustainability measures.
Efficiency in allocating resources to maximize total surplus: It is important to ensure that resources are allocated efficiently to ensure that the production costs are lowered. When chief executive officers allocate resources without considering the future needs of the firm, then this may put such a firm at risk. It may have surplus production now, but may face problems of sustainability in the future.
Ruiz, R. (2015). BlackBerry lays-off an unspecified number of employees globally. Khaleej Times. Web.
The decision by Blackberry to lay-off a number of workers globally will render very many people jobless. The firm made the decision as one of its initiatives to cut the cost of its operations in order to maximize on the profits. The concepts below can be identified in this article.
Demand curve: a change in the number of buyers: The decision to retrench a number of employees at Blackberry is going to increase the number of people who are jobless in many countries across the world. Some of the employees of this firm in Dubai will soon be jobless. This will have a direct impact on the demand curve because of the expected reduction in the number of buyers. These jobless individuals will not be able to purchase some products they can currently afford.
Equality allocating resources uniformly: When wealth is evenly distributed among many people, then the purchasing power of the market goes up because many people will have a capacity to buy products to meet their varying needs. However, the decision by Blackberry to lay-off some employees will only encourage uneven allocation of resources to the public.
Smart, J. (2015). Natural Skin Care through Ages. Emirati Today. Web.
People are struggling to find ways of maintaining their skin through the use of various products. People of different ages should use different types of oil to protect their skin. The type of oil appropriate for people in their 20s is different from that meant for people in their 40s because of the changing nature of the skin as one gets older. The following concepts are clearly demonstrated in this article
Demand curve: a change in income: Older people tend to be richer than the younger people because of the time they have accumulated wealth. The demand curve for the older people tends to change as they consider some of the products they previously used inferior based on their current social status. Their increased income increased their purchasing capacity. This lowers the demand for specific products they used to buy. On the other hand, the demand for new products that meet their current needs may be increased.
Demand curve: a change in tastes and preferences: The changing tastes and preferences may also affect the demand of a product as shown in the article above. People of different ages require different types of oil that suits their skin. It means that the demand curve for various products among a specific group of people will keep changing due to changes in their age.
Thomas, J. (2014). More men than ever are seeking cosmetic fixes for their flaws. The National. Web.
The number of men seeking for cosmetic fixes has drastically increased over the recent past. This article reports that the practice is very common among the rich and the middle income earners. These men are craving for good looks and are, therefore, willing to pay any cost to change any flaws that affect their physical appearances. The following economic concepts are clearly illustrated in the article.
Market shortage: In this article, it is reported that many people in the Middle East are traveling to Europe and the United States for cosmetic fixes to address their physical flows. This clearly demonstrates that the product is not fully available locally. There is a market shortage, forcing the local customers to go to other markets. This gap can be filled if a firm can take an initiative and start offering this product locally.
Income elasticity of demand: The article brings out the concept of elasticity of demand that is caused by changes in income. Those who are going for the cosmetic fixes are those who have stable incomes and can afford to pay the high prices for the products. The procedures are very expensive. It means that if their income is disrupted, then their demand for these products will be affected. Reduction of their income rates will limit their ability to purchase these products.
References
Asmaa, H. (2015). Fatima Bint Mohammed on her quest to keep Emirati cuisine alive. The National. Web.
Cronin, S. (2015). Jumeirah Golf Estates to develop mid-market homes around Race to Dubai course. The National. Web.
Debusmann, B. (2015). Greed is very bad for business. Khaleej Times. Web.
Farhana, C. (2015). Geant offers a world of choices to customers: Hypermarket chain is celebrating 10th anniversary with promotions. Khaleej Times. Web.
Randhawa, M. (2015). ISIL attack will not divide the Gulf peoples. The Nation. Web.
Ruiz, R. (2015). BlackBerry lays-off unspecified number of employees globally. Khaleej Times. Web.
Sahoo, S. (2015). Legoland and Bollywood theme parks to spark new developments when the Dubai project opens. The National. Web.
Sandhya, D. (2015). Dubai Plans Smart Car Rental model to increase public transport use. Khaleej Times. Web.
Smart, J. (2015). Natural Skin Care through Ages. Emirati Today. Web.
Statt, N. (2015). Microsoft tried to buy Sales force for $55 B. CNET Gulf News. Web.
Statt, N. (2015). Microsoft’s Windows app stores still ‘cesspool’ of copyright infringement. CNET Gulf News. Web.
Thomas, J. (2014). More men than ever are seeking cosmetic fixes for their flaws. The National. Web.