Recommended Treatments for Business Investors

Business is not an industry that can be limited to a single industry or geographic location. It embraces all aspects of a market economy, from manufacturing in Asia and Europe to services in the US South Pacific and Canada. With globalization becomes more prominent as trade routes are developed, a business can even be located in an undeveloped country such as Brazil. There is no dearth of opportunities for a successful entrepreneur.

Business economics is a discipline in applied economics that utilizes statistical methodology and mathematical aptitude to study the relationships between firms, industries and the variables influencing the distribution of prices and quantities of goods and services and their relationships with each other. It is used by managers, policy makers and educators to understand the impact of economic decisions on society as a whole. This discipline also examines how changes in the structure of the economy can affect economic institutions and policies. It also looks into how changes in the structure of society and the economy affects the viability of certain institutions and policies.

The major focus of business practices and management is on understanding the market as well as identifying opportunities. In business economics, the scope covers issues like pricing, production, marketing, financing, distribution and consumption of goods and services. The study of business practices covers a wide range of topics like competition and integration, barriers to entry, market structure, government regulation, institutional arrangements, ownership, management and leadership, ownership and control, profits, loss and growth, marketing, technology and innovation. Other important areas covered are entrepreneurship, financial economics, business cycles, investment, international business, micro-enterprise, government policy and micro-marketing.

Microeconomics, which is the study of the decisions, processes and institutions of smaller scale business economies, is another important area of study in business economics. The micro-level studies have great significance in the analysis of the performance of businesses on a national and international level. Microeconomics has three major sub-disciplines: personal, institutional and political economy. The study of business decisions and market aspects at the personal level includes micro-perspectives such as spending habits, social behaviors, emotions, education and preferences, purchasing power, personal choices, family structures, leisure and social activities.

The third sub-discipline of micro-economics is micro-institutional and political economy and it covers the decision-making processes and institutions of individuals and organizations at the household, regional, national and global levels. It studies economic indicators such as unemployment rates, inflation, trade and price fluctuations, durable goods orders, output gaps and balance of payments. Economic policies are adopted to address the changing needs and situations affecting the economy. It considers macroeconomic indicators including output, employment and investment statistics, consumer prices index (CPI), government budget and balance of payments.

The fourth sub-discipline of business cycle is technical and operational economics and it studies the determinants of prices, investment, business financing, operation, maintenance and productivity levels. The study of technical economic indicators focuses on indicators of productivity, investment, fixed capital investments and technology. The evaluation of these determinants determines the direction and speed of business cycles and helps in formulating economic policy. It also forecasts future economic indicators and provides measures to control and stabilize business cycles.

The fifth discipline of business cycle is micro-economic policy and it is concerned with macro-economic indicators and issues such as balance of payments, interest rates, inflation, trade balances and balance of payments fluctuation. Micro-economic policies are adopted to address specific problems in the economy. It examines the effects of direct and indirect taxes, tariffs and subsidies, trade protectionism and open market policies. It provides economic advice on how to improve economic growth and stabilize the business cycle. It also evaluates the performance of state finances and recommends changes in the tax system. Economic policies can be designed to meet the objectives of the government to achieve the desired growth rate.

The sixth discipline of business cycle is value chain management, which studies the effect of supply and demand on the elements of the value chain. It looks into the interaction among external suppliers, customers, producers and distributors. It evaluates the relationships between the elements of the chain and their inter-dependence. The study of value chains helps investors determine the relationships among key stakeholders of a company.

Leave a Reply