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Sony
篇一:as,unemployment,rates,shrink
Assessment: Sony
Contents
Governing the business .................................................................................................. 3
The macro environment ................................................................................................. 3
International environment .............................................................................................. 4
The international business environment ........................................................................ 5
Reference ....................................................................................................................... 7
Governing the business
When a market left to itself can not distribute resources efficiently, market failure results and government intervention follows. There are four types of market failure: public goods, externality, information asymmetry, and imperfect competition and market power (Pindyck and Rubinfeld, 2005). In our company Sony, there are two: externality, and imperfect competition and market power.
Externality refers to a situation where a business activity has an indirect impact on other business activities. In view of negative externality, the government always enacts new regulations or strengthens existing regulations and sometimes even makes specific instruments to directly mandate a corrective measure (Pindyck and Rubinfeld, 2005). The problems of externality concerning our company are mainly environmental issues. For example, Polyvinyl Chloride is a chemical waste we discharged during production. Few years ago, its toxic negative impact on the environment was detected. So, the Japanese government launched a law to cover all known hazards of pollution possible especially chemicals and urged Sony to announce a timeline for substituting polyvinyl chloride in particular.
Imperfect competition and market power includes monopoly and oligopoly. Most of the time, government will intervene to correct the operation of the market or set prices at a competitive level (Pindyck and Rubinfeld, 2005). As an international giant covering a wide range of businesses, Sony is quite susceptive to the charge of abusing market power. For example, Sony France, Sony Europe Holding, and Sony Corporation received a statement of objections issued by the European Commission competition authorities following inspections carried out in 2002.
The macro environment
a. Macro variables
Macro variables, i.e. income, unemployment, inflation, money supply and exchange rates, can show how well the economy is doing and how well the economy is going to be in the future. These variables vary over the business cycle. Business cycle is identified as a sequence of four phases: contraction, trough, expansion, and peak (Hall and Lieberman, 2003). Aggregate demand, the total demand for final goods in the economy at a given time, shows how changes in the price level affect equilibrium GDP. According to Keynasian models (Dutt, 2006), aggregate demand shock
increases the price level and triggers the onset of business cycle. Subsequently inflation grows, and the economy begins to contract with a decrease in income and increase in unemployment. At this time, government usually restricts money supply and decrease exchange rates. These affect our company negatively, such as drop in revenue, shrink in customer pool, and downsize in personnel. But we may get an advantage in exports. On the contrary, during expansion phase, income climbs up, unemployment rate drops, inflation goes down, money supply grows, and exchange rates increase. These are good signs for our company, because we can produce more goods, hire more people, and borrowing more money though our advantage in exports goods may disappear. (King and Watson, 1996)
b. Fiscal and monetary policyas,unemployment,rates,shrink。
Generally, government uses two major types of macroeconomic policy (Hall and Lieberman, 2003): monetary policy (money supply and interest rate), and fiscal policy (taxes, government spending, and government debt). Some are supply side policies which affect the aggregate supply, such as monetary supply. Some are demand side policies which affect the aggregate demand, such as government spending and debt. Some can be regarded as both supply and demand side policies, such as interest rate and taxes. Over the last year, the Japanese government mainly increased government spending and cut down taxes in order to rescue the economy out of 2008 economic turmoil. In the future, besides increasing spending and lowering taxes, new bonds around $115 billion will be floated. Under these policies, the purchase power of our customers has been strengthened and the output of our company has increased slightly, and the goodness of these policies tends to continue.
International environment
a. Globalisation
Tow forces have led to rapid globalization: technologic advancement and free trade. Companies engage in international business mainly for two reasons: to gain cost efficiency and to expand business. Sony is a multinational company with operations in over 200 countries worldwide. It has to deal with issues different from those of local companies in areas of ethics, culture, politics and economics. Ethic codes and standards differ greatly among different countries, so what is accepted in Japan may
not be accepted in other countries. Cultural differences require Sony to make a good balance between centrality and locality. All levels of politics, regional, national and local, can both pose threatens and provide opportunities to our company, so do economic factors because they directly relate to our purposes of globalization: cutting down cost and increasing revenues.
b. The exchange rate
Exchange rate refers to the amount of one country’s currency that is traded for one unit of another country’s currency (Hall and Lieberman, 2003). Exchange rate plays a crucial role in international trade. Since the international business environment has no universal medium of exchange, it is necessary for exchange rate to do the job of translation and conversion of foreign currency (Guithues, 1998). Exchange rate fluctuates as demand for and the supply of foreign currency change. When demand or supply change, the equilibrium exchange rate changes too. As a multinational company, exchange rate fluctuation affects our company’s investment portfolio, exports and imports. Since we own stock in overseas holdings, when the local exchange rate goes up the value of our investment goes up too, and vice versa. If Japan’s exchange rate increases, we will find our exports are less competitive but imports are at our advantage, and vice versa.
The international business environment
a. Globalization
Sony has a global presence with its revenue comes from more than 200 countries. During 2008, Japan accounted for 23.2% of the total revenues, the US 25%, the Europe 26.2%, and others 25.5%.
b. Advantages of trading globally
The main reasons for trading globally are cost reduction and accessing of new markets. To cut cost, international trade can help companies reach economy of scale, utilize different factor endowment, exploit technology, realize reciprocal dumping, and circumvent taxes. After accessing new market, companies can increase returns, gain larger market share, get monopolistic power, stabilize market fluctuation, and promote reputation. (Bartlett et al, 2008)
U.S. unemployment rate jumps to 8.1% in February
篇二:as,unemployment,rates,shrink
Requirement:
Try to memorize and repeat the following information. This work will be the next presentation for you. Be ready!
Working in Canada
Canada offers job opportunities. How to prepare and succeed.
Job seekers line up to enter the job fair at the Marriott Marquis hotelas,unemployment,rates,shrink。as,unemployment,rates,shrink。
in Manhattan, New York, the United States, March 5, 2009.
People seek for job opportunities at a job fair held by the job website Monster.com at the Marriott Marquis hotel in Manhattan, New York, the United States, March 5, 2009. According to the Labor Department report, the country's economy shed 651,000 nonfarm jobs in February, and the unemployment rate shot up to 8.1 percent, the highest level in 25 years.
A job seeker fills a form at a job fair held by the job website Monster.com at the Marriott Marquis hotel in Manhattan, New York, the United States,
March 5, 2009.
WASHINGTON, March 6 (Xinhua) -- The unemployment rate in the United States jumped to 8.1 percent, the highest level since late 1983, as employers slashed 651,000 jobs in February, the Labor Department reported on Friday.
The February reading was above the 7.9 percent rate that economists had expected, and the 7.6 percent rate in January.
The net loss of 651,000 jobs was near economists' expectations for a 648,000 drop in non-farm payrolls.
According to revised figures, the economy lost 681,000 jobs, the most since October 1949, in December and another 655,000 in January, both larger than initially estimated.
Since the start of the recession in December 2007, payroll employment has declined by 4.4 million jobs, with more than half occurring in the last four months.
"In February, job losses were large and widespread across nearly all major industry sectors," the Labor Department said.
In February, the manufacturing sector shed 168,000 jobs while the
construction industry lost 104,000 jobs. The service industry slashed 375,000 jobs while employment in the retail trade industry fell by 40,000 during the month.
Professional and business services shed 180,000 jobs while financial companies reduced payrolls by 44,000. Leisure and hospitality firms cut 33,000 positions.
Only government, education and health services added jobs last month.
The weakness in the labor market comes as the economic recession deepens. In the final quarter of 2008, the economy contracted at an annual rate of 6.2 percent, the worst showing in a quarter-century.
The economy will probably continue to shrink during the first six months of this year, economists said.