ADMS 1000 Lecture 5: Lecture 5

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emeraldreindeer207

24 Mar 2020

School

York University

Department

Administrative Studies

Course

ADMS 1000

Professor

Indira Somwaru

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Document Summary

Industry life cycle and uber short case lecture 5. Industry life cycle: the industry life cycle shows the rise and fall of economic activity over time. It has 5 stages that indicate what phase the economy is under. The five stages are: expansionary phase [economy activity is rising], peak [beginning of contraction phase], contraction. [declining economic activity], trough [very low economic activity], recovery phase [economic activity slowly begins to rise]. This cycle however can be dramatically enhanced through technological improvements. Uber company is a successful company, that entered in the taxi-business industry, where they do not play with the same rules as taxis.

Related Questions

The sales and profits of an individual product may not follow the life cycle pattern.

True

False

During the sales decline stage of the product life cycle, no firm can earn a profit.

True

False

During the introduction stage of the product life cycle:

none of the above.

most products achieve intensive distribution.

promotion is likely to be needed to increase primary demand.

"me too" products quickly take market share away from the innovator.

industry profits are at their highest.

During the introduction stage, what would hinder acceptance of a new product?

consumers may not see the new product as offering a superior alternative to whatever they are currently using.

risk in buying something for the first time.

all of the above.

the new product may not be compatible with the buyer's values.

problems communicating or demonstrating the new product's benefits.

During the market growth stage of the product life cycle:

industry sales grow slowly.

industry profits fall, then rise.

the market begins to fragment into sub-markets or segments.

all of the above.

the industry experiences the smallest profits

What is the most important reason why industry sales level off in the market maturity stage of the product life cycle?

persuasive promotion.

pool of potential users is exhausted.

aggressive competitors entering the markets.

less efficient firms leaving the market.

price cutting.

Gerhard Company has seen most of its competitors drop out of its product market due to declining sales and profits. However Gerhard still has much demand for its products from a small group of loyal customers. In which stage of the product life cycle is this product market?

The length of a product's life cycle:

depends on the ease of entry to the market for competitors.

may be as short as 90 days.

may be as long as 100 years.

varies widely across products.

all of the above.

Regarding product life cycles, a good marketing manager knows that:

all of the above.

once a market goes into sales decline, oligopoly conditions set in.

a company's marketing mix usually should be kept constant over the product life cycle.

industry profits are increasing well after sales start to decline.

entirely different target markets may be involved at different stages of the product life cycle.

Generating "socially responsible" new product ideas:

reduces the long-term welfare of consumers.

is done by all companies.

is easy for new product planners.

is unprofitable and should not be done.

is promoted by consumer groups.

Compose a 4-6 page report, double-spaced, on the following topic. Be sure to illustrate your report with relevant financial numbers and data, and to explain the significance of this data. ** DUE: Friday, April 29th 11:59PM EST ** BACKGROUND INFORMATION: During the Carter administration, long-term US Treasury yields exceeded 15%, and short-term T-Bills yielded near 20%. After Reagan's inauguration, interest rates began to fall as Fed Chairman Volcker's restrictive monetary policy succeeded in containing inflation. Over the past 25 years, US rates have steadily declined: T-Bills are hovering under 1% and the long bond is yielding about 4%. Lately, though, rising oil prices have incited inflationary forces. China and other developing nations have increased their consumption for oil, metals, materials, and food. Thus, both foreign and domestic factors have spurred demand and are contributing to rising prices on a global scale. In addition to this commodity-induced inflation, US consumers are faced with rising costs for essential services such as healthcare and education. The Chairman of the Federal Reserve, Ben Bernanke, is faced with a dilemma. Should the Fed increase rates to contain inflation; or, should the Fed keep rates very low to spur the US economy which is beset by a collapse in home values, an extensive banking crisis, and a faltering stock market ? YOUR ASSIGNMENT: Given this economic background...Compose a 4-6 page report, double-spaced, on the following topic: If the Fed decides to raise interest rates next year, what effect would rising rates have upon the following: (1) Consumer financing for big-ticket items such as autos and homes; (2) the present and future values of annuities; (3) the NPV calculation; (4) the WACC; (5) corporate earnings ? Be sure to illustrate your report with relevant financial numbers. Hint: for topic (3), above, one approach you might adopt is to cite the NPV calculation from previous case problems, then to contrast it against a new calculation performed with a higher interest rate. Cite the numeric effect upon the NPV, and then explain its rationale and its significance. This is the kind of "numeric illustration" that you should provide for each of the five topic sections.

Case Study

Skolnikland is in Eastern Africa, with a population of 30 million people. The country has a plains region, a hill region, and a region with high mountains. It has a number of ecosystems. The plains are dry for much of the year, there is some rainforest, and the rest of the country includes both hills and mountains. There are two seasons of heavy rainfall.

The citizens come from several ethnic groups that tend to live in their own regions and speak different languages. The ethnic groups largely follow one of three different religions. The large cities are mixed ethnically. One ethnic group is economically and socially very dominant. The people from this group live in the capital and most of the large cities. The national language is the language of this dominant ethnic group.

According to World Bank criteria, Skolnikland is among the poorest countries in the world. The economy has been growing at about 4% per year on average over the last decade, but the economy had very slow economic growth in the decades prior to that. The richest 10% of the population controls 80% of the national income.

About 80% of the people live in rural areas and 20% in urban areas. The number of people living in urban areas has been growing recently at an increasing pace. Most people earn their livelihood in agriculture but there is an increasing garment manufacturing industry in the two largest cities. There are also a number of mining industries. In addition, other export industries are beginning to grow, mostly focused on the export of commodities to China.

The total fertility rate is about 4.5 but it has been declining slowly over the last two decades, from over 6. There is an almost equal number of men and women in the population. Infant mortality is about 90 per 1,000 live births. Maternal mortality is about 500 per 100,000 live births. Thirty-five percent of the children are underweight for age.

The adult literacy rate is about 40%. The educational enrollment rate, especially for girls at the primary and secondary levels, has been growing slowly, but steadily. Most recently, this rate has been growing at an increasing pace and about 75% of the girls now attend school regularly, although many of them are of very low quality.

Only about 50% of citizens have access to safe water. Only about 30% have access to sanitary disposal of human waste.

HIV prevalence is 7% of the adult population. The number of new HIV cases annually has begun to plateau. About half of the people eligible for treatment for HIV are on treatment. Malaria is rampant in the plains.

Investments in the road system have been growing at a solid pace in the last decade and the use of private automobiles has begun recently to increase more rapidly.

Skolnikland has a pluralistic health system that is made up of public and private institutions, publicly financed providers, licensed private providers, unlicensed medical practitioners, and traditional healers. There is no health insurance, except for some free services for the poor in the few publicly financed hospitals, which the better off people do not attend. The health system is not very effective or efficient and is generally of low quality. The HIV, TB, and malaria programs are not effective or efficient and they are just beginning to adopt paradigms for services that follow global best practices.

QUESTION 26

What is a DALY?