Sample Article Review Paper on Microeconomics Environmental Scanning

Summary

Hollard discusses the effects of inflation on retirees. The basis of the article is on the lack of adjustment of Social Security payments after inflation. According to the author, even at low inflation rate, retiree’s money is highly affected due to their unique expenditure. Illustrating the extent of effect with figures, the author shows the affect within a span of 20 years and at constant inflation rate of 2 percent. With an average monthly Social Security payment of $1341, the value lost will be $73,000 in 20 years. Thus, inflation shrinks the purchasing power of retirees. Healthcare and housing form majority of retirees’ expenditure. Unfortunately, the rise in cost for the two items is usually higher than the inflation rate. For example, in 2014 the inflation rate was less than 1 percent yet healthcare cost rose by 5.4 percent. Additionally, health care needs increase with age, therefore, increasing cost of health care. Also, Hollard says that the financial situation for the elderly is further worsened by a lack of sufficient pension balance at retiring age. Thus, the author concludes with a recommendation to the Social Security Administration to be adjusting amounts paid to the inflation.

Impact on Me
Title of Article: Kenya was right to burn its ivory stockpile

 

Author: Chris Alden and Ross Harvey
Summary

The authors explain how sound it was economically for Kenya to burn its stock of ivory in efforts to campaign against poaching of rhino and elephants. The value of the burnt ivory is estimated at $110 million. Alen and Harvey argue that although critics would view the act as destruction of valuable goods, it was worth and prudent economically. Destroying the ivory weakened the market, thus reducing demand for ivory in the black markets of East Asia. Consequently, poachers’ incentive is reduced by a lower price of the ivory. On the other hand the authors contest proposals to sell the ivory and use the money to conserve the animals. They say that it is not certain the money would be used to do that and it would also set a bad precedent and encourage poaching. Alternatively, storage of the ivory would be a high opportunity cost in the security and storage, which is also likely to be corrupted to steal the ivory. Such money for securing the ivory can be used elsewhere to safeguard the animals. From a cost-benefit analysis, the animals are symbolic to Kenya and worth more in terms of ecosystem balance and tourism than from trade in the ivory.

Impact on Me
Title of Article: Kroger lowers prices in Mid-Atlantic stores
Summary

The article reports on reduction of prices of some items in 120 stores of the Kroger supermarkets located in the Mid-Atlantic. Kroger supermarket attributed the gesture to high sales in the about 1000 items whose prices they reduced. They include products such as beauty products, fresh meat, grocery and other natural foods.  The supermarket owners also regarded the action as a customer service and even pledged to maintain prices for other items. The significant reductions mean a reduction in expenditure to the customers. It will also increase sales due to more affordability by average income families. Meat prices for Heritage Farms Wieners and Heritage Farms Bologna had been reduced from 89 cents to 79 cents and from $1.39 to 10/$10 repsectively. Milk prices for Coconut Breeze and Blue Diamond Almond brands had been dropped from $2.19 to $1.99. Organic juices, oil, vitamins and coffee prices have also been offered at lower prices. Additionally, incentives for buyers such as fuel rewards, loyalty points, coupons are being offered.

Implication on Me
Title of Article: For Entrepreneurs, Necessity Really is the Mother of Invention
Author: Larry Myler
Summary

The author has written about how the need for call centers to serve customers has led to innovations in artificial intelligence (AI) to serve as AI assistants. The innovators have identified the high wages incurred by businesses in paying customer care personnel. Also, getting people who can communicate with ease to customers of diverse dialect has been a challenge. Call centers are vital for customer care and aid in increasing sales and ensuring that customers get satisfactory feedback. Companies need to employ human resource and it costs them a significant proportion of the revenues. An ICT company called Perfect Pitch has worked on a solution through innovation of software that uses flawless language to communicate to a customer. The software picks the dialect of the caller and uses it to respond, which is attractive and convenient to customers. Such communication is clear and satisfying to customers rather than having a call center assistant responding in unclear dialect causing language barrier problems. In the end, the author says that innovations help in bringing people together.

Implication on Me
Title of Article: The organic food revolution that is minting millionaires
AuthorElaine Pofeldt
Summary

In this article Pofedt discusses the increase in demand for organic foods that is making entrepreneurs in the business to rip profit from the high sales. Nearly three quarters of grocery stores and more than 20000 food stores are stocking organic food products in United States. Sales have already increased by $3.7 billion in the second quarter this year and sellers are projected to increase too by 16 percent. The high demand even across the world has made the business a lucrative one. Start-ups are growing very fast, for example, a new online company in Los Angeles has sold $10 million in about 17 months since its inauguration. Another success story is Feel Good Foods based in Brooklyn that specializes in gluten-free Asian dishes.  The company by Vanessa Philips and one chef has grown in four years to generating revenue of $3 million and employing six full-time employees. However, analysts are noting the increased number of companies in the organic food business. Such a competition will mean that companies will have to differentiate their products. It also means that food companies will have to change their ingredients to make healthy products. Innovation of specialty foods will be essential for customer attractions to foods and drinks. Thus, organic food supply is on the rise in the market which will most likely lead to reduced prices.

Implication on Me
Title of Article: P&G Says There’s More Room to Improve Ad Agency Costs
Author: Nathalie Tadena
Summary

Tadena explains the changes that Procter & Gamble Company is making in efforts to increase sales. It includes cutting cost of business operations and channeling the funds to advertisement. The move aims at improving the efficiency and boosting sales. It will entail cutting expenses in non-working costs such as agency fees and practicing lean manufacturing practices. Moreover, the company has increased funding into research and development, value addition as well as improving supply chain. Such strategies have improved productivity for the company and saved on costs. According to the author, P&G reduced the number of public relations, advertising, and media agencies by 40 percent. The agencies had cost the company $2 billion in expenditure. With an aim of reducing $200 million of its capital spending and improving marketing efficiency, P&G is intensifying use of digital media. Currently, agency marketing for P&G stands at $1.5 billion, which can be reduced significantly according to Moeller, the P&G chief financial officer. In America, about $2.5 billion is spent on marketing through traditional media. Being the biggest marketer of household products, P&G will also reduce the brands it markets and concentrate on highly profitable brands.

Implication on Me
Title of Article: How Amazon’s growth causes retailers to close stores
Author: Suzette Parmley
Summary

Amazon.com is the largest online retailer and in this article Parmley discusses how the company’s expansion is leading to shutting down of stores. Embracement of E-commerce by customers has led the need for increased support staff at Amazon. More 2,000 employees are being employed at New Jersey fulfillment center. A facility at Burlington County will require 500 workers and another one at Middlesex will create jobs for 1500 people. On the other hand, 37,000 retail workers are being laid off this year due to reduced business in the stores. From the article U.S. Department of Commerce reported that in 2015, online sale increased by 14.6 percent compared to only 1.4 percent from physical stores. The declining sales from physical stores are due to e-commerce platforms such as Amazon. However, on loss of employment from physical stores, people should not be worried because they will be absorbed by online sellers. The workers will be tasked with filling of carts, delivery services, and online engagement with customers. The workers are likely to get more attractive wages from e-commerce due to the reduced cost of businesses. Reduced physical space for display of products will save on house cost and cost of operations. Consequently, the company is able to price at low prices due to less expenses.

Implication on Me

 

Title of Article: How Amazon’s growth causes retailers to close stores
Author: Suzette Parmley
Summary
Implication on Me

 

Title of Article: How Amazon’s growth causes retailers to close stores
Author: Suzette Parmley
Summary
Implication on Me