- •1. Four basic factors necessary for any business. Give the arguments for (or against) the statement that business is essential for all economies.
- •2. Advantages and risks of entrepreneurship. How would you initiate the business if you were an entrepreneur?
- •3. Similarities and differences between a sole proprietor and a partnership.
- •4. Favorable and unfavorable points of a corporation. Which of the three businesses would you prefer to work for?
- •5. The difference between intermittent and continuous production.
- •6. Which method of production would you choose for a) custom-made goods and b) standard goods? What are the most important factors in these methods?
- •7. What two methods do employers use to select applicants for an interview? Suppose you are to employ a manager for your firm. Which method would you use?
- •8. The functions of the personnel department. Your first steps as the Head of the pd if you happen to be appointed to this post.
- •9. The general concept of marketing, its constituent parts. Types of markets.
- •10. Modern marketing – new principles.
- •11. The function of distribution from the view of a business manager. The role of a middleman in distribution.
- •12. The distribution system from the view of a customer. Different types of retail outlets.
- •13. The concept of promotion, its main activities. What type of advertising would you use for promoting a new kind of product your firm has just launched?
- •14. Personal selling – what way does it differ from other forms of promotion? Try to persuade a foreign firm to buy a new passenger airliner constructed in Russia.
- •15. Two types of sales promotion activities. What would you do to promote a new type of tea or coffee?
- •16. Interdependence of promotion and market situation. What would you do if the market turns out to be saturated with your goods?
- •17. Four aspects of international business. What is the main difference between Smith’s theory and Ricardo’s theory?
- •18. Discuss the activities of an exporting company and the reactions of the country importing products. How should the country protect its domestic industries?
- •19. The importance of computers. Your opinion about the advantages and disadvantages of using computers. The prospective ways of computer development.
- •20. Types of layout. Compare product layout and process layout.
16. Interdependence of promotion and market situation. What would you do if the market turns out to be saturated with your goods?
Basically there are two ways to increase sales of products: find new markets and increase market share. A company seeking new markets can expand its geographical sales area or try to sell its product to a different segment of the population.
A different market situation requires a different method of promotion. When a market is saturated, it means that there are no new customers to be found. A company then needs to lure [attract] customers from the competition and gain a greater share of the total market. To increase market share, the marketing department of a company must design a total program of promotion for a particular product. Such a program may involve increased advertising to remind the customer of the name of the product. In advertising the company will also emphasize the superiority of its product by comparing it with the competition’s product. A program to increase market share may also include convincing a retailer to allow more shelf space [display area] in the store for the product. Sales promotions may include contests, coupons, and price discounting. Increasing market share involves more stimulation of the buyer’s emotions than does finding new markets where simply furnishing information about the product may increase sales.
17. Four aspects of international business. What is the main difference between Smith’s theory and Ricardo’s theory?
International trade develops because certain countries are able to produce some goods more efficiently than other countries. They exchange goods to satisfy their needs and wants. Efficient production may be the result of several factors. Four of these are climate, natural resources, labor forces, geographical location. A certain climate in a particular country may allow that country to grow agricultural products in abundance. For instance, the climates in the United States and Canada are suitable for production of large amounts of wheat. Natural resources such as oil or coal are abundant in other countries. Countries with a large pool of unskilled laborers are able to produce products which are labor intensive more cheaply than countries with highly paid, skilled labor forces. Another factor is geographical location. Countries like Singapore and Panama engage in banking and trading because they are located on world trade routes.
The Scottish economist, Adam Smith (1723-1790), theorized that in a free market countries produce whatever they can most efficiently grow or manufacture, or what is of the greatest advantage to them. In other words, if they can make more money growing cotton than making cloth, they grow cotton and export it. Then they import cloth from a country that makes cloth more efficiently than it grows cotton. In an uncontrolled free market trade situation, there is international specialization which results in the most efficient production of goods. Therefore, competition guarantees that countries import products which are most efficiently manufactured abroad and export products which are most efficiently produced domestically. Smith’s theory was a theory of absolute advantage. The English economist, David Ricardo (1772-1823), refined Smith’s theory to one of comparative advantage. He theorized that an exporting country does not have to be the most efficient producer of the product; it only has to be more efficient than the country which imports the product. Mutually beneficial trade arises when one country has a comparative advantage.