New Balance: Athletic Footwear. An identification and analysis of some of the ke
ID: 1164506 • Letter: N
Question
New Balance: Athletic Footwear.
An identification and analysis of some of the key non-price factorsthat influence both demand and supply for the firm / industry selected (for some of these factors see, for example, chapter 2 in the textbook).
What is the degree of competitiveness in the industry? What impact is this competition having on your selected firm, and how is the firm addressing competitive pressure? For instance, what short-run and long-run decisions the managers of the firm / industry selected must make to reduce costs of production and enhance competitive advantage?
The effects or expected effects of current macroeconomic events on the firm and the industry, focusing on those that are applicable to the firm and industry in question. For example, the change in the relative value of the U.S. dollar, rising interest rates, and changes in the price of oil.
The impact of the international or global economy on the firm / industry selected.
A recommendation as to whether we should invest into the firm, stay away from its stock, or even short-sale it.
Explanation / Answer
Hi,
As per Chegg guidelines, we are required to answer only first question. You can repost the leftovers as an individual question. Thanks.
Also, you have not provided any details regarding the chapters and it is very difficult to answer the questions as they are chapter's case study specific.
Answer 1. The demand side non-price factors are as follows:
(a) Income of the consumers: If the income of the consumers rises, then it would definitely affect the demand for the product by them. However, it depends whether they treat the product as an inferior good or a normal good.
(b) Change in taste & Preferences: A favourable change in taste and preferences for a product increases the demand for it by consumers.
(c) Price of related goods: If two goods are related, then the price of one product affects the demand for another.
Factors affecting the supply of a product.
(a) Price of inputs: The inputs are used in the production process. The firm uses various types of inputs in producing a good. If the price of inputs rises,then the cost of production also rises. This causes the firm to decrease the supply of a product.
(b) Taxes on production: If government rises excise duty or other taxes on the production, then firm reduces the supply of the product .
(c) Changes in technology: An advancement in technology used in the production method, reduces the cost of production and increases the efficiency in the production process. Hence, the supply rises.
(d) Price of related goods: The price of related goods also affeect the supply of the good.