Eco524 Snearios

Scott Ward

ECO524

5/25/2014

week 3 scenarios

Scenario 1

Pet stores are consider a haven for any pet owner from birds to dogs, ferrets to cats. The store hosts a variety supplies such as food and accessories, supplies, shelters, and even new pets. The pet store is considering giving all employees a 25% discount on top of the benefits they already receive. The main bonus of doing so is that the supply and demand would increase by 25%. This happens because as each employee has an opportunity to give applicants the 25% off, stimulating the need to buy me or buy in bulk. Giving out the 25% discount will increase the number workers whom own a pet or are looking to own a pet. This number will grow as word spreads about the businesses efforts to do so. Also giving employees new perks increases moral and gives the employees a little extra something to strive for.

Scenario 2

The pharmaceutical industry is approximately 25% higher than any other industry listed. By looking at Porters five forces we get to understand more about the success of the pharmaceutical industry. As it is written, the five forces may not all be favorable they have all contributed to its' growth.

As we peak into the five forces we see that there are low entry threats and high entry threats. All of the threats are considered competition to the industry, which counting all of the threats, is very high. When we look at bargaining power, we look at the buyers and the suppliers. The buyers have the most bargaining power at a medium rate and the suppliers have low bargaining power. The main reason for this is the healthcare companies set the market by buying in bulk. Buyers are medium because of generic drug increases and suppliers are low because the market is heading toward bigger corporations. Substitute or generic products have flooded the market because the demand is high for a cheaper product, leading to the industry being 25% higher than...