Will Bury Goes Global
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- Date Submitted: 05/09/2011 06:58 PM
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Will Bury Goes Global
Will Bury is starting a digital books business surrounding the software he created that digitizes books for electronic reading and listening (University of Phoenix, 2011). In this paper, we will discuss the economic concepts related to his situation, suggest three international markets he should enter, what exporting issues may arise, the price elasticity of demand, and recommended pricing for each market.
Economic Concepts
The most basic economic concept is that of a market, which is a place that brints together buyers and sellers of goods, services and resources (McConell & Brue, 2005). Will has to decide which markets he would like to sell his goods in and which markets he can obtain resources from. Will also has to calculate the demand and supply curves for his digital books. He will calculate demand by determining how much consumers are willing and able to purchase at different prices and calculate supply as how many products he is willing and able to sell at different prices. He can conduct market research to confirm how strong each of the five determinants of demand are for each market. “The basic determinants of demand are (1) consumers’ tastes (preferences), (2) the number of consumers in the market, (3) consumers’ incomes, (4) the prices of related goods, and (5) consumer expectations about future prices and incomes” (McConell & Brue, 2005). To determine his pricing, he will also want to take into consideration the pricing of products that are considered substitutes or complimentary since they can directly affect the demand for his digital books.
Will may be conducting business with foreign entities through sales, outsourcing some of the labor, and may also be purchasing supplies or technologies from other countries to produce his digital books (University of Phoenix, 2011). This will require that he research the exchange rates between the US$ and other foreign currencies in the foreign exchange market to ensure that...
Will Bury is starting a digital books business surrounding the software he created that digitizes books for electronic reading and listening (University of Phoenix, 2011). In this paper, we will discuss the economic concepts related to his situation, suggest three international markets he should enter, what exporting issues may arise, the price elasticity of demand, and recommended pricing for each market.
Economic Concepts
The most basic economic concept is that of a market, which is a place that brints together buyers and sellers of goods, services and resources (McConell & Brue, 2005). Will has to decide which markets he would like to sell his goods in and which markets he can obtain resources from. Will also has to calculate the demand and supply curves for his digital books. He will calculate demand by determining how much consumers are willing and able to purchase at different prices and calculate supply as how many products he is willing and able to sell at different prices. He can conduct market research to confirm how strong each of the five determinants of demand are for each market. “The basic determinants of demand are (1) consumers’ tastes (preferences), (2) the number of consumers in the market, (3) consumers’ incomes, (4) the prices of related goods, and (5) consumer expectations about future prices and incomes” (McConell & Brue, 2005). To determine his pricing, he will also want to take into consideration the pricing of products that are considered substitutes or complimentary since they can directly affect the demand for his digital books.
Will may be conducting business with foreign entities through sales, outsourcing some of the labor, and may also be purchasing supplies or technologies from other countries to produce his digital books (University of Phoenix, 2011). This will require that he research the exchange rates between the US$ and other foreign currencies in the foreign exchange market to ensure that...