Impact Of Demand For Company Product - Essay Example

Impact Of Demand For Company Product Company Name: Dairyland Policy Type: Supply – Side Policy Impact On Demand For Company Product The decision to use a supply side policy would have several strengths with the demand for the company product. This is based on the approach to growth within the economy. The national income and economic growth would increase with the use of this particular policy. More important, there would be a decrease in the amount of unemployment that is a part of the economy. These three factors would help with the company product and would provide more opportunities for company growth. This would occur specifically because those in the economy would have more opportunities to buy the products while having a stronger demand with the products offered. The ability for economic growth and a decline in employment would provide more individuals and households that wouldn’t be as limited in buying specific products. There would be the ability to invest in different types of products while looking at other needs which can be added into daily living. More important, there is the ability to create a different amount of spending with the more that individuals are employed and able to work with the product. The combination of increase with the national income as well as the flexibility which most would have for providing new options in products would help Dairyland to have more supplies while factoring in a growth for demand for basic products as well as items that are known within the corporation but not as popular. Even though this would provide advantages for the company, there are also some restrictions with the demand. The inflation would also create a rise in the prices with Dairyland. Currently, there is a direct association with the products that is based on the ability to offer low and wholesale prices. The inflation would automatically increase the amount of prices for the products. Even though the demand would increase from one perspective, there might be the need to change the pricing. This would become a disadvantage as it is the main way in which Dairyland can create and associate with the products that are available in the community. For this particular aspect to work, there would be the need to diversify the products or find ways to decrease debt and other costs within the corporation. Policy Changes on Company Costs Even though there is more demand with the supplies offered, the company costs will increase. The demand for more products also increases the need to meet the demand with supplies. There is also the need to increase and diversify the costs according to the demand. When there are further supplies that are required with those interested in the products, then the ability to expand and create a stronger line of products is required. This means that basic product production will increase, marketing can be used with higher amounts of money and there will be the ability to create a set of new product lines that can easily match demand because of the rising employment and benefits to those in the economy that are able to have more spending within the economy. The inflation rate increase will also amount to the increase in company costs. Because the inflation drastically increases with this model, there will be the need to pay more with the taxes that are associated with this as well as a rise in prices. The strong rise in prices will either cause the products to be placed with higher demand or will decrease the value of the products combined with need to meet the demands with government. This will change costs for production of more goods while rising prices may alter the capabilities of selling the products for the same amount. The result will be higher prices for the products or a decision to make more products at a lower price to balance out the deficit and way in which the changes are associated with the supplies offered. Impact on Company’s Profitability Currently, the profit level for Dairyland is at 8.6% with the debt at 20%. The change will cause the company to remain at a similar level unless there is an alteration made within the internal organization. The change associated with the supply-side policy will change the levels from both sides, dependent on the consumer reactions to the products. For Dairyland to meet the demands of consumers and to remain ahead of competition, there is need to be an increase in marketing and production while changing the economic needs. This will lead to a higher amount of debt for marketing, innovation and production that is required. This will initially lower the amount of profitability that is associated with Dairyland and what is offered to assist those that are interested in the products. While there are expectations for more investments with this particular plan, there is also the ability to gain profit with the correct approach. It is expected that the national income increases. If this is sustained, then there is a potential to increase in the product demand, dependent on the marketing tactics and product innovation that is used. At the same time, the economic growth is expected to grow. If the company uses the correct tactics, then the same abilities to meet the growth can easily lead to a higher amount of profit. However, the inflation causing a rise in prices may also change the demand of products. The initiatives and investments of Dairyland for either innovation or lowering the cost of production within this structure is dependent on how much profit can be made from this tactic. Another concept which may change the focus with Dairyland is with the current placement of the products. Currently, these are sold to wholesalers and to small shops that offer different options for cheese and dairy. If inflation rises to the extreme, this will move the products to a higher price or will force Dairyland to sell bulk at a lower price. This will work to the advantage with the wholesalers; however, the profit margin may decrease because of the main target market that Dairyland currently has. The market is currently inelastic, which will make the profits decrease or will force Dairyland to change prices, leading to a loss in customers that are dependent on the low prices. More important, the small farm shops will have different prices that will change and rise due to inflation. Unlike larger markets, this will make it difficult for the company to continue to sell products without rising prices and may cause either a loss in profits or a loss in sustainability from the main market that is included with the company. However, Dairyland can change tactics to expand the market while overcoming competition with the products that are currently available. While the initial change may cause some loss, there is the ability to change marketing tactics and the overall approach to sales to begin changing the way in which the inflation will affect the store. This is specific to the current cost structure, which is now leading to new investments and financial interest. Dairyland can use this to boost the market and move into other types of stores for potential profit and expansion of products. Policy Change on Financial Situation The policy change on the financial situation for the company has some strengths specifically with the opportunity to expand. The current investments as well as the ability to work into more products because of demand can help the company to continue to grow. This can be combined with options for growth. However, this has to be met with changing the way in which Dairyland currently works into the market. There isn’t any advertising that is used and a small marketing budget. There is also a sense of stability for wholesalers and suppliers in the local markets. This puts the financial situation of the company in danger, specifically because the demand will also lead to an increase in prices. Dairyland will have to invest in a different form of marketing as well as other prospects for sales and products for the supply policy to work. More specifically, there will be the need to change the approach that is used with the pricing while considering inflation and how this will affect the profit margin of the company. The opportunities that are combined with the financial situation are based on growth of the company and of the products which are available. The only way in which Dairyland can increase profit is to also increase the amount of products available and to have a wide range of dairy products that not only are inclusive of the products sold to wholesalers. Having products that are associated with high – end dairy products and which can be sold for a higher price can also be included. The threats and weaknesses with this are from the lack of innovation that has been used for the products. The need to go through approval and to expand the business so it matches with other larger competitors remains the main threat. Product expansion and finding the right way to work within the market becomes problematic with the competitors as well as knowing the outcome. If this is done incorrectly, then it could lead to large losses with Dairyland. The overall changes with the finances for Dairyland are first inclusive of the costs of production associated with the company. This is defined by the need to produce more and to lower the amount of costs with the production. This is furthered by the need to keep the employee rates and other aspects at the same level. However, this has to be combined with keeping the low prices or finding other measures of increasing prices through new products and brand lines. The financial growth and sustainability will be dependent on product growth. If Dairyland doesn’t move into product growth, then there will be a loss of profit because of the inflation and the higher amount of demand that will occur at the same time. Strategies to Counter Policies There are several strategies that Dairyland can use to change the way that the policy will affect the supplies. The policy is built specifically to assist with more supplies being developed for the community while working into new options for businesses to grow with supply. Dairyland can use the policy in its favor by working toward more products that are made available to consumers while expanding the brand name and the available products with different pricing. By doing this, the foundational products can still be sold at a lower price to wholesalers and smaller farmers. At the same time, the higher priced products and variations that are available can be sold to new investments and stores that are able to create a different approach to selling the dairy products. The increase and expansion in target market is another way that Dairyland can increase its product line. This is currently a part of smaller stores and wholesalers. However, the corporation is well – known and can move into larger supermarkets and areas that are able to provide different types of products. The threat with this is the higher amounts of competition and the unknown brand name that would be placed on shelves. There would also be difficulty in finding the right store areas to move into. Investors that are currently looking at the company would be required to assist with investments and new prospects. There is also the ability to move into overseas markets as a part of the target market. The supply policy would lead to a decrease in the difference between currency exchange rates, meaning that Dairyland could keep the same prices while selling into an overseas market. However, the unfamiliarity of the product and the capabilities of shipping overseas would be problematic in creating the right target market. Dairyland would also have to find the right places to introduce the products while expanding what is available for those overseas. While the increase in product line is the main approach that Dairyland can take, there are several threats associated with this. The main problem is with introducing the product line into a new market while other competition has already become a part of this. Dairyland will need to develop a strategy that is unique and outside of the competition which already has dairy products. Furthermore, there will need to be brand products that are not focused on pricing as a discount item, but instead which fluctuates according to items. Finding specialized recipes, making the dairy products in a way that differs from other brands and providing some products with quality and others with pricing can help to diversify the company while meeting needs with inflation and the changes with the policy. Changes in the Marketing Strategy Currently, Dairyland doesn’t have a marketing strategy that is used with the loyalty of customers and word of mouth being the main attribute to selling the dairy products. The advantage of this is the ability to have loyal customers while keeping a sense of consistency with the products and meeting the needs of those in the community without the need to expand or spend money on the marketing required. There is also the ability to establish different types of relationships with wholesalers as well as those in the smaller stores. This particular approach to building relationships is one that Dairyland can keep in order to keep brand name and a strong reputation. While the lack of a marketing strategy works with a specific reputation, it won’t provide sustainability with the growth of products. The marketing strategy has to come with the nature of the product first. The product requires expansion into products which are sold for a lower price to more luxurious types of brand products sold for a higher price. This will offer new opportunities outside of the market and will enhance the product against the competition. More important, it will create an elastic set of prices that can be used for different target markets. By doing this, there will be the ability to expand with products while ensuring inflation and the rise in demand doesn’t negatively impact Dairyland. The advertising can further be enhanced with some marketing that is invested in. A marketing package should include a variety of options to reach new target markets. The need for Dairyland to expand into different markets is also one which will require new investments in marketing. Announcing product releases, refining what is needed in terms of the market and looking at the way in which the brand image is looked into can all help Dairyland to increase the products while working toward a different image. However, the ability to work into new target markets will need to be monitored through investors that are able to help with the initial launches or will require a different approach to the budget, specifically so the profit margin remains stable within the corporation while allowing the expansion to occur with the products. Policies to Lobby for the Government The supply side policy is one that is most beneficial for companies that want to grow. The strengths of this particular policy provide a different approach to working toward expansion while assisting with the overall growth of the economy. Reducing unemployment and assisting with the overall expansion of businesses is the one area that should be lobbied for. While there are problems with inflation and specific types of taxes, this can provide businesses with more opportunity for expansion of the products while ensuring that there is continuous growth. However, the competition will need to be looked at by approaching products that are unique. Competition that is already ahead financially may have more opportunities than those that are only beginning growth. For this to work effectively, different methods that won’t cut out the smaller businesses will need to be used. The deflationary policy in this instance won’t work as effectively. The rise of unemployment as well as the rise in taxes creates several problems with selling products while providing individuals with the capacity to buy and work. While Dairyland can use this effectively with the current pricing strategy, it doesn’t provide opportunities for the growth of the corporation. By doing this, there is the ability to reduce expenditure of the government; however, the businesses that are working toward sustainable products won’t have the ability to sell the products and will have to cut costs. The use of the deflationary policy, because of unemployment rates, won’t provide reasonable opportunities for the businesses and can’t offer pricing changes or fair competition. The reflationary policy is one that could work effectively with the government, specifically because it raises the aggregate demand. This will help individuals and businesses to increase the amount of consumerism and spending which will help businesses to grow. The problem with this policy is from the inflation which will accrue as well as the rises in taxes and interest rates. The consequences of raising the aggregate demand for Dairyland have more consequences. Because the company depends on the ability to offer lower prices and wholesale products, there will be the inability to provide the same amount to companies. This may hinder the opportunities available to the company and will create an increase in prices. Finding a way to avoid the inflation and the rise in taxes can help to mainstream the needs that are within the company while ensuring that lower prices can still be offered. The model that can be used with the supply – side policy is based on the redistribution according to income. Dairyland can do this by offering more varieties in the products. However, the redistribution that is offered can provide more opportunities for Dairyland to continue offering the same products while getting the right pricing needed for the available products. With this particular option, Dairyland will have the capability of investing in new products while having a sense of reliance on the dairy products that are already offered through the company. There will also be the capability of using the same products and expanding the market by working into larger stores while working with investors. Combining these two policies can also help with the inflation that is associated with the supply – side policy, specifically so it doesn’t affect the distribution of the current products. Read More