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Session 1 - SYnc

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35 views46 pages

Session 1 - SYnc

Uploaded by

DARSHANA S
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Caption this ?

Decision Making

?
What is
Business ?
Decision
Making
Why business decision making ?
Looking back…
22 business families
Small business
The family runned business
LPG
Looking Diversification
back… MNCs
Inter-firm
Inter-industry
International rivalry
UNDERSTANDING THE NATURE AND DEGREE OF MARKET FUNDAMENTALS
MARKET CONDITIONS COMPETITION AND THE BUSINESS
ENVIRONMENT
Product market

Understand Input market

Financial market
Markets

Circular system
How we make decision?
How it is done?

The application of economic


concepts, theories, logic and
analytical tools in the assessment
and prediction of market conditions
and business environment has
proved to be great helpful in
business decision making.
That’s the reason
it is called as

Managerial Economics
or
Business Economics
What is?

ECONOMY ECONOMICS
Economics is a social science. Its
basic function is to study
how people, individuals,

Economics households, firms and


nations maximize their gains
from their limited resources
and opportunities.
An economy  or economic
 system consists of the
production, distribution or
trade, and consumption of
limited goods and services by
different agents in a given
Economy geographical location.

The economic agents can be
• Individuals,
• Businesses,
• Organizations,
Governments
• Managerial economics can be
broadly defined as the study of
economic theories, logic, and tools
of economic analysis that are used
in the process of business decision
making.
Managerial
• Economic theories and techniques
Economics of economic analysis are applied to
analyse business problems,
evaluate business options and
opportunities with a view to
arriving at an appropriate business
decision.
Application of economics in managerial
Decision making
Managerial decision areas
?

Application of economic Use of quantitative methods


concepts and theories in (math's, statistics,
decision making econometrics)

Managerial economics
Application of economic concepts,
theories and analytical tools to find
optimum solutions to business problems
Case 1

• ABC company plans to


launch a new detergent
product for which close
substitute are available in
the market
• What are the key things
the managers must think
before he plans to launch
the business?
Two important
Decisions

# Production
# Sales
Production
Decisions
• Techniques available
• Cost of production
• Supply position of inputs
required to produce the
planned commodity
• Price structure of commodity
• Cost structure of the
commodity
• Availability of foreign exchange
if commodity to be imported
Sales
Decisions
• Market size
• Market trends
• Demand prospects for the
product
• Trends of the industry
• Price of the competitors'
products
• Supply position of the
complementary products
Understanding
our Economy
•The three-sector theory is an economic theory which divides
economies into three sectors of activity-Colin Clark and Jean
Fourastié.
Agriculture and allied
activities

Fishery
Primary
Forestry

Mining and Quarrying


Secondary Sector – Manufacturing
(manufacturing, processing, and construction )

Non Tertiary sector-Services


agricultural
activities Trade, Hotels and Restaurants

into two Transport, Storage and Communication 

sectors. Financial services such as Banking, Insurance

  Real estate and Business services

Public Administration

Others services.
Role of
• Share in National income
primary • Providing employment to largest
section of population
sector in • Providing Food to Millions
• Providing raw materials to industries
the (eg., food processing, paper etc.,)

economy
First phase: Primary sector: 70%
Traditional Secondary sector:
civilizations 20%
Workforce quotas: Tertiary sector: 10%
categorized into small scale
industry and large industry
1. labour-intensive
ROLE AND technology
2. Technology –intensive
IMPORTANCE (TATA)
• Share in national income
OF • Employment generation
• Creation of Infrastructure
SECONDARY • Provision of consumer
goods
SECTOR
Second phase:
Transitional period
Workforce quotas:

Primary sector: 50%


Secondary sector: 30%
Tertiary sector: 20%
• Contribution to National
Income
• Contribution to Employment
• Attracting Funds from Foreign
Countries
ROLE AND • Contribution of Service Sector
to Exports
IMPORTANCE OF In recent years India’s service
sector has contributed a lot in
SERVICE SECTOR earning foreign exchange for the
country through exports. Our
  business services which include –
IT, consultancy, legal services, etc.
have become world standard .
Third phase:
Tertiary
civilization
Workforce
quotas
Primary sector: 10%
Secondary sector: 20%
Tertiary sector: 70%
National income,
creation of employment
LINKAGES opportunities, supply of
AMONG THE goods and services and
creating infrastructure.
THREE
SECTORS OF All the three sectors are
interlinked by
THE complementing and
ECONOMY supplementing each
other.
Story
• Demographics
• Economy
• GDP
• Industrial output
• Agriculture
• Environment
What will you • Geography
• Human rights
look in a • Military
• Politics
country? • Business specific
(consumption habits, culture,)
Macroeconomics
Macroeconomics is a branch of
economics dealing with the
performance, structure, behavior,
and decision-making of an
economy as a whole.
Micro vs Macro
Microeconomics
Microeconomics is the branch of
economy which is concerned with
the behavior of individual entities
such as market, firms and
households.
• http://www.mospi.gov.in/
• https://dbie.rbi.org.in/DBIE/dbie.rbi?site=
home

Links for • https://tradingeconomics.com/india/infla


tion-cpi
• http://agriculture.gov.in/
Economic • https://testbook.com/blog/crops-in-india-
gk-notes-pdf/
Data •
•
https://www.ibef.org/research/reports
https://data.worldbank.org/
• http://www.imf.org/external/index.htm
• https://tradingeconomics.com/united-
states/indicators

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