The Role of Business Economics in Business Process

Introduction Business economics can be defined as a branch of economics that deals with the application of various microeconomic models in the analysis of a business process. Business economics analysis will help a business to understand and adopt various strategic measures that will enable a business to have a competitive advantage (Carson, Hecht Thomas 2002).Advertising We will write a custom assessment sample on The Role of Business Economics in Business Process specifically for you for only $16.05 $11/page Learn More Business economics analysis is a daunting task fraught with disappointments. A poorly undertaken business economics analysis might lead to the collapse of a company. On the other hand, if the business economics analysis is professionally done, the company is likely to prosper and make a lot of profits. Hence, it is important that business undertakings should perform a well-planned and organized business economics analysis (Mcconnell, Br ue Flynn 2009). Micro economics can be defined as the process of studying a business decision regarding the allocation of scarce and limited resources within an organization. Micro economics is concerned with the effect that various business behaviors have on demand and supply of a company’s products. There are various micro economics issues facing organizations. Such issues include issues related to growth, unemployment, and inflation. Micro economics is also concerned with the effects of national policies on an organization. Such changes in policies may include changes in taxation policies (Bardhan Udry 1999). This research paper is going to evaluate the micro economics issues facing small and medium-sized businesses in the United Kingdom using the case study of Telecoms world plc. The research paper will also examine the various strategies that the company can adopt in order to overcome the micro economic challenges. Background information Small business enterprises are the backbone of a country’s economy. They are the major contributors to a country’s economy in terms of offering employment and are also sources of government revenues. Small and medium size enterprises have various advantages which include but not limited to the following: they provide a source of revenue to the government, they provide employment to citizens, and also they utilize the small resources available in a country. Therefore, it is of vital importance that small and medium enterprises be protected from various threats that face them (Burkett 2006).Advertising Looking for assessment on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More There are various micro economics issues that SME’S face. These challenges include but not limited to the following: changes in taxation policies, inflation, growth and the effect of unemployment. Telecoms World Plc. Telecoms world plc is an enterprise in the Uni ted Kingdom that deals with the telecommunications products and services. The company deals with cost effective telecoms solutions ranging from cloud hosting services to mobile phone services. The business deals with call routing, fax and email solutions, and Beskope solutions. The Beskope solutions include the services like call queuing, voice recognition and data capture. The company also deals with interactive voice response for its inbound call services. The business environment the business is operating in The telecommunications industry is changing dynamically, and a company should be well placed to overcome the changing challenges in the telecommunications industry. The changing trends in the telecommunications industry are quite demanding and quite expensive to adopt. Small and medium enterprises are finding it difficult to cope up with these rapid changes. Telecoms world plc has not been exempted from these challenges. Telecoms world plc is facing various challenges includi ng but not limited to the following: competition from bigger firms, poor market segmentation, and lack of enough funds (Frank 1964). Competition from bigger firms Telecoms world plc is operating in a high competitive industry. The telecommunications industry is considered one of the most competitive industries, with the key beneficiaries being the bigger players in the industry (Frank 1964). Telecoms world plc is facing a major threat from its competitors, especially the bigger companies like Vodafone Company and the orange company in the United Kingdom. The bigger competitors in the market are known to give high quality and diversified products and services to their consumers. They are also involved in various promotions for their customers, hence posing a threat to Telecoms world plc.Advertising We will write a custom assessment sample on The Role of Business Economics in Business Process specifically for you for only $16.05 $11/page Learn More Vodafo ne Company is ranked as the best telecommunications company in terms of service delivery, as well as consumer satisfaction. Their services are of high quality, and most consumers are able to afford most of their services and products Vodafone has very well-structured current and future objectives. The company has a vision of being the leading telecommunications company in the world by providing the state-of-the-art Edge technology. Hence, the company’s objectives are geared towards achieving the above mentioned vision statement. The company’s current strategies are geared towards innovation and creativity. This has seen the company become the best ranked telecommunication company in terms of innovation and creativity (Frank 1964). The major competitor of the Telecoms world PLC is Vodafone Company. The major strength of Vodafone is in the call rates the company offers to its customers. The company offers subsidized call rates as well as data rates to its customers. Also , the company has some offers to its customers. Some of the offers include selling mobile phones at a subsidized rate. The other major competitor of Telecoms World PLC Company is T-Mobile, which also offers mobile services to its customers. The company is a threat to Telecoms World PLC Company because it is ranked the third telecommunication company in UK. T mobile strength is in the quality of services and products the company provides. Services offered by the various competitors Competitor services Vodafone Sale of mobile phones and the associated accessories. Provision of internet services using 4G modems Mobile telephony services T- mobiles Mobile telephony services Sale of mobile phones and associated accessories. Provisions of 3G internet connection services. Competitor Profiling Name strategy assumption capabilities Vodafone The company is winning a large number of customers through provision of cheap call rates and cheap services The assumption from th e company is that consumers prefer cheap products and services that they can afford. The company is capable of investing in large telecommunications infrastructure like fibre optics. T mobile The strategy of the company is in the quality of its services. The company provides high quality services to its consumers. The assumption of the company is that, consumers prefer quality services as opposed to cheap products and services The company does not have enough resources to invest in high cost telecommunication infrastructure like fiber optics. Telecoms world Plc does not only face competition from key players in the industry but also faces competition threat from small and new entrants in the market. The major small and medium enterprise competitors for telecoms Plc include the following: SIM only choices, business phone systems, business telephone systems, and Nextiva Company. Poor market segmentation The company faces poor market segmentation in terms of clientele base. Teleco ms world plc is facing a problem of expanding its market base because most key players like T-mobile and Vodafone has the most clients in the United Kingdom telecommunications industry. The following table indicates the market distribution of the various key stakeholders in the industry Company % Market share in terms of clients T-Mobiles 15 Orange 25 Vodafone 30 Nextiva 10 Telecoms world plc 5 Business phone systems 5 Others 10 Lack of enough capital Telecoms world plc faces a major financial constraint. The company lacks enough capital that it can invest in various telecommunications sectors including provision of internet connectivity services, data bundles, and provision of high edge telecommunications infrastructure systems like fiber optics technology. This has limited the company to provide only services and products that are not of a high standard and quality (Bardhan Udry 1999).Advertising Looking for assessment on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Micro economics issues facing the company The major micro- economics issues facing the company include but are not limited to the following: taxation policies, growth, and inflation (Bardhan Udry 1999). Taxation policies and legal requirements Taxation policies may be described as the various rules and regulations set forth by a state, which regulates the taxation procedures in a country. Various countries will have different taxation systems. Taxation policies, to some extent, will determine the survival and sustenance of a business. Telecoms world plc has been largely affected by the changing trends in the taxation policies in the United Kingdom. The taxation policies changes in the United Kingdom have increased the amount of tax small businesses are supposed to remit to the government. Such, stringent taxation policies have increased the amount of expenses Telecoms plc spends in terms of taxes. This eventually reduces the company’s net profit (Carson Hecht Thomas 2002). Also, the regulations regarding the telecommunications industry in the United Kingdom have made it hard for telecoms World to invest in more lucrative opportunities. Before being given the license to operate as an ISP (internet service provider), an organization is required to buy a license from the telecommunication regulatory agency in the United Kingdom. This license is too expensive, which makes it hard for Telecoms world plc to venture into such business opportunities. Growth Business growth can be described as the increase in business operations, profits, and clients. Such growth cannot be merely achieved through maintaining the status quo, but through embracing continuous improvement in a business. Continuous improvement will ensure that a business adopts the relevant technologies that will ensure the survival of a business in the current dynamic world (Carson Hecht Thomas 2002). Telecoms world plc is facing a challenge in terms of growth. The company has been recording a slight increase in terms of development. This can be attributed to the fact that telecoms world plc does not have enough money to invest in more profitable ventures that will ensure that the company grows in terms of investments, profits and clients. The following table indicates the percentage growth rate for the company in the last three four years Year 2009 2010 2011 Percentage growth 2% 1.2% 1% Inflation Inflation can be defined as the rise in the prices of commodities and services in a country. Inflation will also determine the purchasing power of money. Inflation generally weakens the purchasing power of money and currency in any country. Inflation also leads to hoarding of goods because; businessmen have hopes that the price of goods and services is going to increase (Mcconnell Brue Flynn 2009). The recently experienced global meltdown had an adverse effect on telecoms world plc. The company experienced low demand for its services and products during this period, wh ich eventually led to low sales. Also, the increasing rate of inflation has had adverse effects on companies. The increased inflation has increased the prices of telecommunications commodities and services, hence making it hard for consumers to afford such services. Also, the increasing inflation rate has led to some commodities being scarce and difficult to find. This has made telecoms world plc to have low sales returns (Mcconnell, Brue Flynn 2009). What the company needs to do in order to compete favorably From the above analysis, it is evident that, Telecoms world plc faces a stiff competition in the telecommunications industry. In order to overcome the various competition challenges, the company needs to develop a sound and viable strategy that will enable telecoms world plc stay at the forefront in the telecommunications industry in the United Kingdom. There are various measures that Telecoms plc can adopt in order to have a competitive advantage over its competitors. The fol lowing are examples of the strategies which can be adopted by the Telecoms world plc: Merging with bigger industries in the market. Providing high quality services to consumers Investing in advanced marketing techniques. Merging with other companies In order to compete well with its competitors Telecoms world should merge with the big players in the industry. Such a merger will enhance technological transfer between the two companies. Merging will ensure that both companies are able to share the various technologies, which will enhance efficiency in the organization. Also merging with other companies is important because Telecoms world plc will be able to share part of the other company benefits like a stable market, large clientele base and huge profits. Merging with other key players in the industry will also create a strong brand name for the company (Frank 1964). Provide high quality services and products Currently, Telecoms world does not provide standardized and high quality products and services. This is attributed to the fact that the company does not have enough capital to invest in state of the art technologies. From the analysis conducted, most consumers preferred other companies like orange, Vodafone and T- mobiles because they are offering high quality products and services. In order to sustain the competition pressure, telecoms world plc should adopt a quality management system that will ensure provision of high standardized and quality services. In order to gain the confidence of consumers, the company needs to ensure that, their customers are satisfied. The quality department will also ensure that there is efficient and effective utilization of resources in the company. This will also reduce the operating costs of the business (Pfeifer 2002). The quality department should also undertake some surveys in order to gather relevant information about what other players in the industry are doing. This will enable the company to adopt a relevant cont inuous improvement strategy. This will ensure that, Telecoms world plc produces goods and services which are far above the products and services produced by its competitors (Hoyle 2006). Invest in more advanced marketing strategies Marketing is the key to success in various businesses. In order for a business undertaking to succeed, the business should adopt extensive marketing of its products and services. Marketing will create a good brand name for the company’s products and services. Also, marketing will increase the company’s product awareness, and also increase the company’s sources of revenue (Frank 1964). Marketing is multidimensional and will always involve activities like media advertisements, running promotions, running road shows, online marketing as well as direct contact with customers. The choice of a company’s marketing strategy will depend on the available resources to undertake the marketing strategy. In order for Telecoms world plc to co mpete with its major competitors, the company needs to perform a market analysis. The market analysis should be geared towards studying of consumer trends and supplying the required products to consumers at the right time. One way to undertake such a market analysis is through the use of data mining technique. Data mining can be defined as the process of studying information stored in a database, with the aim of unmasking predictable trends which are not explicitly expressed by the database (Han Kamber 2011). Data mining is an effective way of understanding consumer behavior because it will provide an organization with the relevant information for decision making. For instance, Telecoms world can conduct a data mining tool in order to determine consumer consumption trends in terms of telecommunications products and services (Han Kamber 2011). For example, the company can invest in cloud computing data mining concept, for knowledge discovery. The company can find relevant consumer data on server logs and find out, which telecommunications services and products are preferred by consumers. The company can increase the supply of these products and services at the time they are highly demanded. Conclusion In conclusion, telecoms world plc operates in a highly competitive environment. In order to outwit its competitors, the company needs to invest more heavily in sophisticated quality management and marketing strategies. The company also needs to consider the option of merging with other key players in the industry. Reference List Bardhan, P Udry, C 1999, Development microeconomics, Oxford University Press, Oxford. Burkett, J 2006, Microeconomics: optimization, experiments, and behavior, Oxford University Press, New York. Carson, R, Hecht, J Thomas, W 2002, Microeconomic issues today: alternative  Approaches, Sharpe, Armonk. Frank, N 1964, Market analysis: a handbook of current data sources, Scarecrow Press, Metuchen. Han, J Kamber, M 2011, Data mining: conce pts and techniques, Elsevier, Amsterdam. Hoyle, D 2006, Quality management: the essentials, Butterworth-Heinemann, Oxford. Mcconnell, C Brue, S Flynn, S 2009, Microeconomics: principles, problems, and policies, McGraw-Hill Irwin, Boston. Pfeifer, T 2002, Quality management: strategies, methods, techniques, Hanser, München. 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