ECONOMIC ANALYSIS

Economic Analysis in understanding in Business Context

Economic Analysis in understanding in Business Context

Introduction

The assignment discusses the significance of economic analysis in understanding the decision making in a business context. For this purpose we have selected Pet Care Industry in the United Kingdom. We have identified the major competitors in U.K pet care market and analysed the nature of this market by explaining types of competition in the market. We have analysed the pricing strategy used in the market and how the competition evolved during the past few years. During our economic analyses, we have observed several factors that affected pet care industry in the United Kingdom. The factors are also discussed in detail. The factors included change in technology and wide categories of product ranges. Further, we classified the data gathered in a logical format and lastly, presented our conclusions derived from the data after the economic analysis.

Discussion

Economic Analysis

Economics is a social science that deals with the utilization of scarce resources. It deals with the production, distribution and consumption of goods by dealing with scarce resources. Economic analysis, whereas, is the study of the forces that are responsible for determining the distribution of scarce resources. (Savage, L. J., 1948.pp. 200-202) Economic analysis provides a detailed analysis of how markets operate and how to predict market behaviours in the future, by analysing the previous cycles, events and trends. On a larger scale, economic analysis is also used by governments to assess the financial state of the nation. It is also used to determine tax rates, by the government. (Blaug, Mark,2007, pp340-347)

Economic analysis for decision making in business context

Economic and financial analysis is of significant importance in the decision-making process in Business context. Economic and Financial analysis is used to gain an insight of the internal situation of any company. It also helps organizations to capitalize resources and maximize strengths to achieve the organizational objectives. From an external perspective, economic analysis helps the customers, shareholders, competitors and auditors to know the expected development of the company. Economic analysis is helpful in achieving major goals of a company such as surviving with its competitors, being profitable and growing among the company's competitors in the industry. Decision making in a business context requires following objectives which can be fulfilled through economic analysis only: • Searching the internal reserves of a company for further growth • Locating inaccuracies to eliminate them in future • Reviewing management aims and objectives • Knowing the impact of social organizations in improving the economy of the company The economic analysis is the analysis of the organizational structure and control, the calculation of value added, the macro-economic context, industry and sector matrix analysis, the financial, political and the natural environment of an organization. (Haslam.C.,Neale.A., Johal. S., (2002) pp. v- Viii)

The Pet Care Industry of the United Kingdom- An Overview

We shall discuss the above mentioned criteria for performing an economic analysis of a company in detail by selecting Pet Care Industry in the United ...