Industrial Economics Term Paper First Draft
Industrial Economics Term Paper First Draft A manager has to make demand analysis, anticipate time value of money, detemine supply and demand levels, create a goal for his/her firm and understand the importance of profits, use his/her company’s products’ elsaticity tendencies before produce them in large quantities, maximize it’s profits and minimize production costs. A firm can be merge with another one because of profit maximization target and minimizing it’s cost. Experiences are also important factor for firms’ managers. Dividing it’s departments professionally and observing their working quality and criticizing their actions are the assignment of the manager. Studying “Industrial or Managerial Economics” we can determine basic concepts about industry and understand how to manage a firm successfully. There are many market places exist and many industries’ try to do with others and this manner creates competitiveness. A great manager has to focus on it’s firm’s weaknesses, strenghts, opportunities in market. Focusing on this basic concepts surface others and these are explained by a Harvard Professor called Micheal Porter who is a leading authority on comapny strategy and the competitiveness of nations and regions. Mr.Porter generate a simply “The five forces framework” and we can simply understand power of buyers and input suppliers, industry rivalry, importance of types of goods and requirements to enter market. How these forces influence industry profitability is the important factor that a manager has to focus on. But the basic point of a firm is that maximize it’s profits and to do that a manager has to know “time value of money” concept. Let’s give an example about time value of money. For instance a firm make good investment and receive $10,000 cash prize from a supplier. Assume that a manager has two options, he/she can receive $10,000 now or he/she can receive $10,000 in three years. Like mmost of us, a manager as an ordinary person, he/she can