Retail Economic Struggle In Santa Cruz, CA - Research Paper Example

Retail Economic Struggle in Santa Cruz, CA Introduction The retail industry is the second biggest industry in the United States. It plays a huge role in the economy of the US in that it provides employment to approximately 12% of all the employment opportunities. Retailers in California face a huge struggle in the market in case they want to purchase new merchandise or they bring a new brand in the market. At times they buy merchandise that is mostly of low class and hence sell at low prices to middle class consumers leading to low income. It is a big challenge for them to sustain their customers in order to keep them coming back to the same store. Climate can at times be the source of the struggle leading to stiffer and stiffer competition. Some of the businesses that could be affected by changes in climatic conditions include furniture, electronics and farm produce (Morrison17-15). Background information of retailers Most of the retail businesses in US are retail stores; they are mostly single store businesses. There are different forms of retailers; wholesalers and wholesaler retailers (Chartkoff 1984). Retailers sell a limited number of products because they serve a smaller population in a small market while wholesalers sell their products in bulk as they do their businesses with companies, big retailer shops, supermarkets or hypermarkets. Wholesalers are the distributors for all services and hence they play a part in the struggle among the retailers. The retailers may choose to buy their products directly from the manufacturer which gives them an added advantage of discounts and low prices. Video industry has been seen to be one of the most flourishing businesses in California. However, the industry has become vulnerable to economic recession and hence it is experiencing economic downturn. The retail shops have had a successful run but it seems they are almost at the finish line. In April after the results were out, it was worse than expected and this led to heightened fears. Despite having attended a conference in LA, an analyst at Electronic Entertainment Design and Research said there was no concrete solution to come up and ease the struggle. In the conference they demonstrated different technological devices to show the extent of the new technology. A lot of game products are produced every month. As a result of many suppliers, the prices fall drastically and this affects the productivity of a firm. The current economy of California has been brought about by the presence of private investors (Blackburn 430-426). Challenges Economists argue that a drop in prices has adverse effect on the economy at a large. Many retailers have to struggle to keep their prices constant to avoid loosing their customers. Customers always look for retailers with good bargains. Video industry in California has had many challenges to deal with as retailers. Many retailer stores face the struggle of raising more money in the market due to the competition that is being experienced in the market nowadays. Many retailers are forced to lower prices so as to earn an advantage over their competitor. At times many people start a business without enough capital and the experience to run a retail store (Chartkoff 1984). Infrastructure facilities Lack of good infrastructure, telecommunication and social amenities is a major challenge to all the businesses in California. All traders require; transport to move form one place to another, communication to pas message from one person to another and social amenities like health centers, schools, housing and other facilities to provide the basic needs in a community. Any community without the basic requirements of a community cannot excel in business (Fagan 2003). Investors do not have access to their products and they are not in a position to take the service and product to the investors too as a result of bad infrastructure facilities. Many towns in US are rushing to get into the video industry business without considering the problems they will encounter like weather conditions, taxes, incentives, local economy, and confined government hospitality. Lack of finances may lead to collapsing a business enterprise considering it is not making any profit. Video industry deals with electronics; they are affected by adverse change of weather which makes them malfunction. For example if a compact disc is rained on, it spoils and it cannot be repaired. Changes of weather conditions also affect the behavior and habit of people in CA. People remain more indoors in cold days so the video industry gains a lot of money (Morrison 20-16). However in the hot days, many people prefer going swimming, nature walk, fishing and other outdoor activities. The video industry in this case looses. Taxes Economic incentives and taxes is another struggle retailers go through in their businesses. Economic incentives are meant to enhance preservation of citizens occupying a certain neighborhood from exploitation from traders and suppliers. This helps in maintaining a good relationship between retailers, traders, and suppliers ion any market place se of economic incentives corrupts economic professionals and risk loosing their credibility to their customers. Rising of taxi is another struggle the retailers form California will have to face. In case of a crisis, taxes could be raised to address a national disaster or calamity. However, nowadays taxes are being hiked to address personal interest of the person in leadership (Russell 9-7). Competition Competition poses a threat to all business people. Competition is healthy as it regulates the prices of goods and services. However, unhealthy competition may lead to disagreements and conflicts between certain organizations. This may be brought about by a retailer selling their services of products at extremely reduce price to get the attention of the customers. The director of Entrepreneur Program AT USC argues that some retailers suffer more than other. Many retailer stores are brought down due to weakened consumer confidence. Retailer owners may loose credibility if they offer service or products that are in a bad condition. Other forms of entertainment Video industry has also been faced by other forms of entertainment like radio, games, television, internet and many more. As a result they have, they have to offer very good service and products for them to come out the best in entertainment. Copyright and piracy is also another struggle that the video industry is going through at the moment. Many people prefer buying the pirated movies and songs and other entertainment facilities because they consider them to be cheaper than the original copies (Paul 2005). Unions have been formed to help curb piracy by promoting the local artistes and hence build the video industry. The video industry should also learn to know and understand what the audiences. They are not aware of the tastes and preferences of their audiences and hence they bring the wrong content to the wrong group of people; hence conflicts of interest. Native people California has been infested by other native people like the Asians and the Latinos. They have invaded their businesses market posing as a major threat to the retail traders of California. They end up edging out the people from California as it is well known that Asians are good in business. They have come up with cheaper products and substitutes which they advertise as the original produce thus attracting more customers. Many people from California have been associated with immigration which has really affected their way of doing business. Although it keeps migration alive, it plays a part in deterioration of the economy of California. The rate of population growth has decreased and hence work force becomes a major challenge for retailers (Russell 10-8). There has been a huge struggle to produce enough workforces but the gap between the demand for economically educated college students and the Californian residents has been widened. Many retail traders want to employ educated and skilled personnel while the residents from California want to be employed by the foreign companies and organizations despite their education levels. Cutting of costs At time, employers have been forced to suspend or reduce staff to cut costs as a result of endorsements, debts and other financial expenses. They end up laying off staff members and the process of hiring is suspended. This poses as a major struggle between the retailer traders and the customers who prefer services of a certain employee. At times it may lead to the customers shifting to another store in search of the employee who used to serve them. Open positions in the organizations are kept open, retirement benefits are reduced and staffs are asked to cater for some of expenses like medical, lunch or transport. All these are done to cut cost to cover for some contingencies. Economic strength of state is defined by various temperaments; population growth, average personal income and the revenue the government obtains. Cutting of cost is applied in video industry too to limit the expenses and increase the income (Paola & Phylis 279-277). Recommendations To help in the video industry business, the government should come up with strict measures to deal with problems like piracy and copyrights. These are the two major problems facing the video industry. Government should also come up with strategies to help market the products and services locally and internationally. Other problems can be solved by broadening the economic opportunities, providing cheaper accommodation, creation of more jobs opportunities, coming up with strategies to sustaining the economic progress (Paola & Phylis 280-276). Public investments should be initiated by the government to help reduce the rate of unemployment in California. This will provide income and hence reduce the struggles between retailers as they will have more demand. Policies and strategies should be formulated and implemented to act as a guide to traders, employees, employers and suppliers. The government could also offer capital to individuals who are willing to start their own businesses to ease unemployment rate. New capital opens doors fro new investors to a state. The government could stop the immigration of people from California to enhance available human labor which will be of use to the state by improving the economy. Improved economy leads to improved standards of living in a state. Population increase acts as strength to bind a society together enhancing team work in workplaces. Foreign investors should be discouraged form getting skilled and trained labor form outside California and employ the citizens of California. Ethnic and minority markets should be encouraged to enhance diversity. These markets are on the rise in California and they should be given the support they need like funding. Funding could be done by the government or other non governmental organizations as stipulated in the State funds. They could also seek help from other educational and non educational institutions to enhance private funding (Russell 7). Information is answer to all questions concerned with capital investments. Education should be provided to all the traders, suppliers, employees and employers to educate them on effective investments. The government could also play a part in bringing in other foreign manager for investment programs in areas where there are no good managerial skills and talents. These programs would bring in experienced managers to assist in proper running of business and also train people on how to be effective managers. Training people from different society would increase the diversity and hence it would strengthen the industry and hence improving the economy (Wilson 28-27). Conclusion Video industry is a good venture but unless the government intervenes, the industry might collapse soon due to the many challenges they are facing. Californian is a state that has been facing major challenges which have an impact on economic. Economic and social strength of California will be weakened if the challenges facing the industry are not addressed. All enterprises should be supported whether private or public as they play a big role in shaping the society and the state. Private investors bring in foreign exchange and innovations to the industry enhancing diversity. California is faced by the problem of low unemployment which has an adverse effect on the states revenue. Retails or wholesale, it is a matter of great common interest to all the citizens of California and hence they should work together to boost the economy. Economy of California will be in great danger if polices are not formulated and implemented top business people, traders and consumer to guide them in their transactions (Wilson 27-25). Works cited  Blackburn, Robin. The Making of New World Slavery: From the Baroque to the Modern, 1492 1800. London and New York: Verso, 1998. 400-460.  Chartkoff, Joseph L., Chartkoff, Kerry Kona. The Archaeology of California. Stanford: Stanford University Press. 1984.  Fagan, Brian. Before California: An Archaeologist Looks At Our Earliest Inhabitants. Lanham, MD: Rowman & Littlefield Publishers. 2003. Morrison, Michael A. Slavery And The American West: The Eclipse of Manifest Destiny And The Coming of The Civil War. Chapel Hill: University of North Carolina Press, 1999. 13–21. Paola, Sensi Isolani & Phylis, Cancilla Martinelli. Struggle And Success: An Anthology of The Italian Immigrant Experience In California. Center for Migration Studies, 1993. 230-289. Paul, Sabin. Crude politics: the California oil market, 1900-1940. University of California Press, 2005 Russell, David Lee. The American Revolution in the Southern Colonies. Jefferson, N.C., and London: McFarland, 2005, 7- 12.  Wilson, Kenneth G. The Columbia Guide to Standard American English. New York: Columbia University Press, 1993, 27–28.  Read More