Table of Contents Page 1 Introduction 1 2 Background 2 2.1 Theoretical Background 2.2 The Background Of The Case Study 3 Research Methodology 7 3.1 Research Questions 3.2 Research Design 4 Data Collection and Analysis 10 4.1 Data Collection 4.2 Data Analysis and Interpretation 4.3 Critical Analysis of the Research Findings 5 Conclusion 15 5.1 Summary Of Research Findings 5.2 Recommendations References 17 1 Introduction The Hong Kong Civil Aviation Department’s approval for reducing the commission for travel agents by airlines (Legislative Council, 2010) demonstrating the fact that airlines reduce their dependence on travel agencies as a distribution channel…
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The objective of the paper is to provide advice to a large travel agency of Hong Kong from an economic point of view in order to reassess the company’s business strategies. Relevant official data available in the government sites, the local airlines, and travel agencies will also be collected to facilitate the analysis in this study. Our prime focus will be to provide an in-depth analysis of the pricing strategies adopted by the local airline industry by using the concepts of market structure, cost and revenue structure and price discrimination. With this purpose, an in-depth analysis will be conducted through literature review describing the current business environment of Hong Kong airline industry. 2 Background 2.1 Theoretical Background Evidences have revealed that economic factors have a significant influence on the business environment of any and every region (The Times 100, 2008; Kitching & Et. Al., 2009; Floyd & Wooldridge, 1997). Based on this concept, experts have firmly stated that macro and micro economic factors, both play a crucial role in influencing the pricing strategies of an industry. Besides, the macroeconomic environment which may greatly affect the demand side of the market, the micro economic factors can be witnessed in terms of the market structure of the industry, the price discrimination taking place in the market scenario, its cost and revenue structure as well as the demand elasticity observed in the industry (Nadar & Vijayan, 2009). Musonera & Ndagijimana (2001) stated that the pricing strategies of an organisation depend largely on the political, economical, technological and social factors. For instance, when the economic factors tend to be highly fluctuating, the pricing strategies of organisations are developed to be flexible which can effectively deal with the economic variations. It is in this context that the aforementioned factors create a string impact on the market structure of firms in an industry which in turn influences its pricing structure (Mazzucato, 2000). Hong Kong airline industry is scrutiny by various regulatory bodies, such as Civil Aviation Department, International Air Transport Association (IATA), Airport Authority Hong Kong and others. These regulatory bodies deliver the industry with a strong and well-organised structure (Information Services Department, 2010). The initial factor that will be considered in this study is the influence of market structure on the pricing strategies of the airline industry. Market structure relates to various elements existing in the business environment such as product differentiation, market concentration, economies of scale, vertical integration of the competitors in the market and other similar aspects that in turn define the market structure of an industry. Therefore, market structure can be defined as “the organisational characteristics of a market that largely determine where it fails on competitive spectrum between monopoly and competition”
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“C5 - Managerial Economics Essay Example | Topics and Well Written Essays - 4250 Words”, n.d. https://studentshare.org/macro-microeconomics/1423157-c5-managerial-economics.
In the demand and supply framework a detailed explanation of the demand and supply is given with the notion of market equilibrium and also how disturbances in the market self adjusts and return back to its initial equilibrium state. In the production possibility frontier paradigm, its construction is given for two countries and how the countries with comparative advantage can benefit from trade is exhibited.
Europe. There are several companies operating in the supermarket segment in the UK market. Britain’s food retailing is the ‘most concentrated’ in Europe. With top five supermarket chains such as Tesco, ASDA, Sainsbury’s, Morrisons and Safeway, they control approximately 70% of all food obtained from the market.
Managerial Economics Essay NAME: AFFILIATION: UNIVERSITY: COURSE TITLE: DATE OF SUBMISSION: Managerial Economics Essay One of the best articles that have discussed the importance of International Trade in World Market has been published in New York Times magazine which has highlighted the importance of trade agreements in this globalization period (International Trade, 2012).
In other words, oligopoly can be termed as ‘competition among the few’. Admittedly, oligopoly has a large number of specific characteristics which encourage the companies to exhibit collusive behaviour (Fershtman & Pakes 2000). The first important characteristic of oligopoly is interdependence.
The author argues about the effects of real-world transaction costs and states that they are rarely low enough to consent to efficient bargaining and so this theorem is almost inappropriate in economic reality. The Coarse’s theory is viewed as an essential basis for the analyses of most modern economic cases including government regulations.
Managerial economic further explore the behaviour of consumers and producers as well as their impact to the economy. In above connection, managerial economics takes into consideration not only micro economic concept but also some components of macro economics. This is because organizations do not operate in isolation but rather they interact with external factors.
From this paper it is clear that now the value of the housing properties is determined by both the supply side and the demand side factors, which include the price at which the seller would like to go for the transaction with a prospective buyer and the actual price which the buyer would like to pay (Ngai and Tenreyro, 2009, p.7).