Business Cycle
The tendency toward instability within the context of overall growth is the business cycle. The cycle has 4 phases:
- Peak
- Recession
- Trough
- Recovery
In addition to identifying the phases of the business cycle, one has to be able to assess the business cycle’s impact on an entity’s operations and its industry.
Globalization
Business Risks increases with Globalization. The business environment and decision-making become increasingly complex as globalization brings capital flows, international competition, technology innovation, migration of labor and wok, global workforce managerial issues, increased mergers and acquisitions, environmental concerns, etc.
Further, for cost savings, operating effectiveness, or operating efficiency, many firms are resorting to Business Process Outsourcing.
Protectionism
So how does one protect their business in a global environment?
Resource planning is essential in globalization because profit maximization requires the production of optimal output with the least resources. Factors affecting demand for resources include demand for the final product, the productivity of resources, prices of substitutes and complements, and elasticity of resource demand.
Pricing is also essential in globalization and may be used to gain an advantage in the market.
The government may take measures to protect domestic producers. Forms of protectionism include Tariffs, Import Quotas, Anti-Dumping, Repatriation, Export Subsidies, Countervailing duties, etc.
If you have found this blog to be useful, you may share with your friends. Thanks!
