Introduction
An outline of economics
Economics
An entrepreneur’s comprehension proves to be crucial to the setup of sustainable competitive advantage in this era. As a result of the heightened rate of globalization, increased competition, and rapid technological transformations entrepreneurs encounter new and unforeseen hurdles. The aforementioned transformations have led to significantly improved quality and quantity of information that an entrepreneur assesses when determining business related issues. It is compulsory for entrepreneurs to assess and implement this newly acquired knowledge in the decision-making process. The acquirement of new knowledge plays a crucial in the creation of sustainable competitive advantage.
Currently, the markets competitive advantage lies in capabilities like the abilities and expertise that the entrepreneurs forward to the business venture. According to Aguilar (1967), he defined environmental scanning as the process through which a leader collects pertinent information of events unfolding outside the business and uses it to monitor the firm’s future strategy. The search to identify these trends establishes the firm’s prospects and concurrently poses tests to the unrelenting success of the firm. In the words of Pearce and other authors, environmental scanning acts as radar that notifies the pilot of prevailing conditions that he/she is possibly to come across to.
Economics
The issues that an energy firm is likely to encounter after conducting its environmental scan are well spelt out in this paper. First and foremost, the firm has to consider the competitive landscape of the market. The firm has to acknowledge the presence of competitiveness while developing its business strategy. The other issue that may sprout once a firm conducts its environmental scan is the regulatory developments. Accountability of the firm will persist to be the watchword. The principle of accountability is not only confined to the public sector but goes further to include the private entities.
The government will put the measure in place to ensure that the practice of sustainability is the norm of the firm. Additionally, the issue concerning the turnover of the firm’s venture shall be put into consideration. The firm economics has to ensure that the venture it delves into has the potential of being commercially viable since the objective of any business undertaking is generating profits.
Macroeconomics
Macroeconomics is a domain concerned with the tendencies of the whole economy and not a specific fraction of it. This study delves into economic phenomena such as GDPs. How it impacted by shifts in national income, price levels and unemployment. An exemplary example of how macroeconomics works is the variance in net exports and how it would affect the nation’s GDP and unemployment rate. Alternatively, microeconomics refers to the study of resolutions entrepreneurs make concerning the apportionment of prices and resources of merchandise and services. Under this study, the regulations and taxes imposed by the government are also put into consideration. All the forces that affect the price level in an economy including demand and supply are highlighted in microeconomics.
Macroeconomics can be measured through national income, prices and the rate of inflation, and finally real variables. Under national income/GDP the economic activity of the nation’s economy is measured. Statistics from GDP measurement provide a good basis for the structure of a nation’s economy. With regard to the inflation rate; it is measured as an increase in prices which are conveyed as an annual percentage. Inflation rate tabulates the speed at which the prices of commodities upsurge on average. For one to be able to measure the rate of inflation he. She must have the overall information on the level of prices. Real variables can also act as a measurement in macroeconomics. The aggregate of all outputs into one definite figure in macroeconomics is achieved through utilizing money as the yardstick for measurement.
Microeconomics
Microeconomics can be measured through stock variables and flow. The principle of stock variables is measured through the wealth and inventories of the firms and people in the market. Alternatively, the flow variables are measured through a period of time and consideration. Factors such as incomes and the rate of production and consumption. The other factor embraces so as to aid in measuring microeconomics is price. The prices can be categorized into two which are nominal and real price. Nominal price refers to the absolute dollar price of the merchandise when being sold in the market. On the other hand, the real price is worth comparative to a comprehensive measure of prices. The utility can also be adopted as a measure to microeconomics. The utility can be adopted by measuring the extent to which a market cannot do without a product.
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