Miles to Go Review

Miles to Go

In current business publications, find examples of firms whose strategies to increase profits focus primarily on generating more revenue. Compare these cases with firms that are trying to cut costs to increase profits.

Firms like Twitter and Facebook are focused on increasing profits by generating more revenue. These companies are part of the social media industry and are growing exponentially every year. With this growth they are not having to cut services or employees to save money in fact they are having to hire more employees and are working to expand farther into more markets. We see with younger firms, that are established they are working to expand there brand and have not reached the maturity faze of the business life cycle.

Retail businesses such as Gap and Old Navy that are well established and have gone past the maturity faze of the business life cycle into the decline faze and are trying to enter the rebirth faze instead of the death faze. Firms like these have been around for decades and have to find ways to reinvent themselves to remain relevant for consumers. These firms have shut down stores and reduced their workforce and have moved more to online ordering to reduce costs and retaining the ability to reach more customers to increase profits.

Use demand and supply analysis to illustrate the change in chicken prices described in the above article.

The chicken market demand has been lower compared to the cost incurred for production with the rise in grain prices and the use of corn to produce ethanol. This causes an increase in costs of production and a decrease in the supply which means the supply cure would shift to the left on the demand and supply analysis. Added to this change is an increase in the cookout season need for chicken causes the demand curve to shift to the right.

Describe what has happened in the corn and soybean-meal markets and how that has influenced the chicken market.

Corn has been diverted from feed production to be used in the production of ethanol; this means there is less corn for feed and drives the price of corn higher due to increased demand. Soybean-meal has then been used as a substitute and the price of that has risen as a response to the demand. With the rise in cost of feed and a lower demand, chicken production has been decreased. This has caused a decease in the need for feed which will then lead to a supply of corn and soybean-meal and will drive the prices downward until chicken demand rises which will increase the demand for feed.

References

Farnham, P. G. (2014). Economics for managers (3rd ed.). Saddle River, NJ: Pearson.

Forbes Welcome. (2014, August 25). Retrieved from http://www.forbes.com/sites/greatspeculations/2014/08/25/gap-beats-on-profits-raises-outlook-gets-aggressive-on-asian-expansion/

Jones, C. (2013, October 8). Forbes Welcome. Retrieved from http://www.forbes.com/sites/chuckjones/2013/10/08/twitter-could-become-profitable-in-2015/

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