Effect of Government Policies on Pricing Strategies

Effect of establishment Policies on Pricing StrategiesLong-Term Investment DecisionsApril BarnesDr. Bernadette WestAbstractIn this paper I go out outline a plan that managers in the low-calorie microwaveable food comp all could follow when selecting determine strategies for qualification their produces as inflexible as practicable. I volition then examine the major(ip) effectuate that disposal policies dedicate on cropion and employment. I will prognosticate the effectiveness effects that government policies could consent on the company. Afterwards, I will determine whether or not government regulation to ensure justness in the low-calorie microwavable food industry is needed and cite the major reasons for government meshing in a discolorationet economy. After I will examine the major complexities that would arise under expansion via capital projects and envision pick up actions that the company could take in order to prevent or cite these complexities. Lastly, I will suggest the substantive manner in which the company could create a convergence between the interests of stockholders and managers and indicate the around in all probability advert to profitability of such a convergence.Outline a plan that managers in the low-calorie microwaveable food company could follow when selecting pricing strategies for making their products as inelastic as possible. Provide a rationale for your response.The scathe elasticity of demand affects a companys pricing strategies by determining the optimal profit margin. Price elasticity of demand defines the period of change of demand in relation to the change in damage of a product. The higher the elasticity, the higher the demand fluctuates in response to price. In general, around companies would like for their products to be inelastic. When a product is inelastic, the price of the uncorrupted may increase, while the supply and demand of the product atomic number 18 unaffected. In different words, if the price of a product were to go up, consumers would comfort debase the product, as well as if the product price were to go down, consumers would still buy the product (Investopedia Inelastic, 2014). When considering the inelasticity of a product it is important to select the congruous pricing strategy. When it comes to selecting the best pricing strategy, it is best to first understand what consumers be willing to spend on a product. This can be through with(p) by conducting market research and surveys. Managers can also select the pricing strategy by making reasonable assumptions based on past purchases and patterns. Then managers should consider the competition and the quality of their products. If the competitor sells a product with high quality at a certain price, it is not possible to sell a similar product with lower quality at a higher price point. The managers should first plan to sell each unit or product at the lowest price possible while still being able to br eak even and tolerate for all of the companys expenses. When it comes to price strategizing, on that point is no potential for price discrimination. Price discrimination occurs when a seller sells a product for the highest price the consumer is willing to pay for (Investopedia Price Discrimination, 2014). When it comes to a microwaveable food company, there is no reason to sell products at different prices for each customer as it is also illegal. take a subprogram the major effects that government policies have on return and employment. Predict the potential effects that government policies could have on your company. governing body regulations and policies can have a positive as well as a negative impact on production and employment. when imposed on melodyes substantially increase production and operating cost of the business which could result in reduced operating and economic profit, earning per sh ar, earning stream, dividend and finally market equity value for grapplehol ders. The United States regulatory stringency has contributed to impairment of U.S. manufacturing firms competitiveness in the international markets. This loss of competitiveness is believed to be reflected in declining exports, increasing imports and a long-term movement of manufacturing capacity from United States to other countries. As mentioned, government policies can have a positive impact as well, for example the food preventive regulations. The food safety regulations are standards and procedures that companies must follow to hold open a safe and sanitary environment for employees as well as for the consumers who purchase the products ( viands Safety Program, 2014). Food safety consists of regulating prepping, handling, and storage of food in ways that prevent foodborne ailment and other sicknesses. If these rules were not in place, companies would manage food in any way they please and could potentially get consumers sick and face galore(postnominal) lawsuits.Determi ne whether or not government regulation to ensure equity in the low-calorie microwavable food industry is needed. Cite the major reasons for government function in a market economy. Provide ii (2) examples of government involvement in a similar market economy to support your response. authorities regulation is needed to ensure fairness in the low-calorie microwavable food industry. Government involvement is needed in a market economy to maintain social efficiency and equity. Social efficiency is attained at the mark where the marginal benefits to consumers for either production or consumption are similar to the marginal costs of either consumption or production. Matters of equity are challenging to evaluate due to the subjective assessment of what is and isnt a fair sharing of resources (Pearson Education, 2010). As similar to the self-propelled industry, the government regulates many aspects. The government regulates auto manufacturing, repair, maintenance, recycling, sales an d dealerships. The government also has policies regarding environmental, safety, and import regulations and standards (SBA, 2014).Examine the major complexities that would arise under expansion via capital projects. Propose key actions that the company could take in order to prevent or address these complexities.Capital expansion is generally an investment in a major company that wishes to expand or restructure operations without losing control of the business. about disadvantages that may be faced when undergoing capital expansion would be business owners potentially losing a percentage of the company, investors wanting to be a part of day to day discussions and decisions as well as company secrets revealed (G. Segal, 2013). In order to address these complexities, the company can set up regulations or contracts with the investors or equity partners stating the conditions and ownership of the company.Suggest the substantive manner in which the company could create a convergence bet ween the interests of stockholders and managers. Indicate the most likely impact to profitability of such a convergence. Provide two (2) examples of instances that support your response.One recommendation would be that the stockholders become very close and adamant about the companys expenses and cash flow. By creating share owners out of management, executive management will take action in its greatest interest as a shareowner, in which will be of an advantage to all equity investors (M. Anson, 2004). Creating share owners out of management would likely survive a merger or capital expansion because this gives the chance for the owners and investors to work together and make decisions that are best for the company.ReferencesDOH (2014) Food Safety Rules and Regulations retrieved on defect 8, 2014 from http//www.doh.wa.gov/CommunityandEnvironment/Food/FoodWorkerandIndustry/FoodSafetyRules.aspxG. Segal (2013) WHAT ARE THE PROS AND CONS OF USING truth CAPITAL? retrieved on March 8, 2014 from http//chironthebusinessdoctor.com/the-pros-and-cons-of-using-equity-capital/Investopedia (2014) Inelastic retrieved on March 8, 2014 from http//www.investopedia.com/ price/e/inelastic.aspInvestopedia (2014) Price Discrimination retrieved on March 8, 2014 from http//www.investopedia.com/terms/p/price_discrimination.aspM. Anson (2004) ALIGNING THE INTERESTS OF AGENTS AND OWNERS AN EMPIRICAL EXAMINATION OF EXECUTIVE COMPENSATION retrieved on March 8, 2014 from http//iveybusinessjournal.com/topics/governance/aligning-the-interests-of-agents-and-owners-an-empirical-examination-of-executive-compensation.Uxuyo_ldUucPearson Education (2010) Reasons for Government Intervention in the Market retrieved on March 8, 2014 from http//wps.pearsoned.co.uk/ema_uk_he_sloman_econbus_3/18/4748/1215583.cw/SBA (2014) Automotive retrieved on March 8, 2014 from http//www.sba.gov/content/automotive1