Assignment:
Scenario
Microeconomics: The Forces of Demand and Supply; Macroeconomics: Issues for the Entire Economy; Evaluating Economic Performance; and Going Global
Slide Narration
Slide 1 Tammy: Welcome to Contemporary Business.
This week I will be meeting with Vicky Simpson, Corporate Vice President of Walters Aeroworks, regarding the organization's current corporate strategic position in the marketplace, and the need to make decisions regarding the company's future.
Let's go visit Vicky and see how we can help!
Slide 2 Tammy: Good morning, Vicky! Thank you for taking the time to speak with me this afternoon regarding the strategic position of the company. I know this is a crucial time in the company's history, and I appreciate that you will share with us your perspective on the company's future.
Vicky: Tammy, I am glad that you have stopped by so that I can give you the information you are seeking about our company.
Tammy: Vicky, can you give me an idea of what you envision Walters Aeroworks to be in the future?
Vicky: I certainly can! Let's look at it from two different perspectives, the microeconomic view and the macroeconomic view.
Slide 3 Vicky: From the microeconomic view, we are concerned about small economic units, such as individual consumers, families and businesses, and how and what we do as a company impacts those units. In other words, we are concerned about consumer behavior!
The forces of supply and demand determine what each economic unit needs.
Vicky: Supply is concerned with the willingness and ability of sellers to provide goods and services, while demand is the willingness and ability of buyers to purchase goods and services. The interaction of these two factors is shown on the sample supply and demand curve shown here.
The demand curve is the part of graph that shows the amount of a product that buyers will purchase at different prices, while thesupply curve shows the relationship between different prices and the quantities that sellers will offer for sale, regardless of the demand.
When we have the interaction between the two curves, we have effects on prices and the availability of products. The intersection of the two curves is called the equilibrium price, which is the prevailing market price at which you can buy an item. If the actual market price differs from the equilibrium price, buyers and sellers tend to make economic choices that restore the equilibrium level.
Slide 4 Tammy: So, how does this whole concept of supply and demand impact what Walters Aeroworks decides to manufacture and sell to its customers?
Vicky: Great question, Tammy! As you know, part of what we do is produce specialty parts of replica World War I and World War II airplanes. These builders cannot just open up a parts catalog from a company like Cessna or Piper and find the part that they need to complete the build of their planes. Instead, they need custom parts that are expensive to produce in a quantity of one or two at a time. These parts are also required to meet very exacting standards so that they can receive the airworthiness certificates required for their planes to fly. That is where we can assist them in what they need.
Tammy: Is that why Cliff Walters started this company in the first place?
Vicky: Exactly!
Since we can help many different builders of the same type of aircraft, we can use our state of the art technology to manufacture the parts of the highest quality at an affordable price that these builders would not be able to build themselves.
Tammy: That makes perfect sense. That's a solution that really sets a company apart from anybody else.
Vicky: Very true! We, however, do not have a large stockpiles of these parts, because there are a limited number of builders of these replica aircraft. Due to this, we have to produce the parts on a "just in time" basis, so that we can keep a stockpiles of raw materials, but only make the finished products when they are actually ordered. Our prices do not change drastically over time, unless our suppliers decide to change their prices, but we buy enough of the raw materials to get bulk quantity discounts to allow us to keep our prices reasonable.
"Dealing with the Global Workforce"
• From the scenario, assess the importance of developing and adhering to a strategic plan when a company attempts to expand beyond its domestic business operations. Suggest two (2) best practices that a company should follow when attempting to complete such an expansion. Justify your response.
• From the "Business Etiquette: Dealing with the Global Workforce" reading in Chapter 3 of the text, determine two (2) reasons why using the identified tips are important when you are using virtual team members for your organization. Provide at least two (2) examples of where these recommendations would be effective for a company that operates internationally.
Journal Entry:
Journal Entry 2: Prepare a one to two (1-2) paragraph journal entry that examines your learning experiences with ORION in Week 2 of this course, that addresses the following:
1. Determine the primary manner in which ORION has increased your business knowledge in the related subject area.
2. Discuss specific challenges that you may have experienced with any of the subject matter presented, and point out the areas for which you would like more information.
3. Suggest at least two (2) possible applications of this week's material to the company that you currently work for or hope to work for in the future.