Inflation problem of Hongkong Essay Example | Topics and Well Written Essays - 5000 words

Inflation problem of Hongkong - Essay Example In cases where the market integration is absence, it implicates the economic welfare of the country. Therefore, the country has to address the problem urgently, to avoid facing the partial price transmission that might cause deficit in the balance of payment (Hansen, 1990, p. 16). The failures, which are imminent for not co-integrating the business operations results from inadequate information to the business players. It is necessary for the country a better communication and transport infrastructure, to ease the dissemination of business information, and transport the final products to the market respectively (Hansen, 1990, p. 18). This would ensure the success of the business. Testing Framework for Price Transmission Price transmission encompasses the relationships of the market dynamics, integration that arise from the trade discontinuities and policies governing trade operations and the pressure that the dominant players exert in the market (Hansen, 1990, p. 17). In testing the price transmission components, the following techniques are used; causality, co-integration, symmetry, and error correction mechanisms (Hansen, 1990, p. 18). Notably, each technique provides an insight on the specific price transmission component.... 16). The failures, which are imminent for not co-integrating the business operations results from inadequate information to the business players. It is necessary for the country a better communication and transport infrastructure, to ease the dissemination of business information, and transport the final products to the market respectively (Hansen, 1990, p. 18). This would ensure the success of the business. Testing Framework for Price Transmission Price transmission encompasses the relationships of the market dynamics, integration that arise from the trade discontinuities and policies governing trade operations and the pressure that the dominant players exert in the market (Hansen, 1990, p. 17). In testing the price transmission components, the following techniques are used; causality, co-integration, symmetry, and error correction mechanisms (Hansen, 1990, p. 18). Notably, each technique provides an insight on the specific price transmission component. Co-integration In markets tha t are spatially separated, one notes that the chain of supply differs from one geographic region to the other. p1t & p2t follow similar order in integration. Therefore, the prices of goods are co-integrated when, p1t – b p2t = ut (3) is I (0) (Hansen, 1990, p. 19). Where, b is co-integrating vector or (scalar when there are two variables). (3) is co-integration regression. Notably, in linear combination, without the stochastic trend, the p1t & p2t values are said to be integrated, implying that in future, the commodity prices would be closely together. Precisely, this explains the market integration concept, where, the prices that are drifted apart are subsequently drawn together, as a result as some forces within the

Channel Strategies and the Value Chain Assignment

Channel Strategies and the Value Chain - Assignment Example he different channel strategies and value chain within an organization is essential in improvising the advantages of the process units with a functional or operational unit. An example is that is single input is required by different organizational units, the benefits which can be obtained here will involve creating one function to purchase, store and distribute that single unit to other business units within the organization. Further, this will aid towards cost reduction processes within the organization making the role of the channel strategies indisputable within the value chain (Osterwalder, Pigneur & Tucci, 2005). Automotive industry is affected by the effects of growth going global and supply chains. An analysis into the effects of growth going global reveals that unlike before where automotive industries would assemble their products in one place, the change towards growth going global has led to shift within the automotive industry as they now diffuse their products, services, technology and employees across national borders therefore decreasing their supply chain. When there is a reduction in the supply chain, it means a considerable reduction in the distribution strategy is realized therefore automotive industries benefits from this as their revenue is increased because of the affordability of their products to consumers. Most automotive industries therefore obtains leverage within the channel and the value chain by opening up their sub branches in different areas to help in cutting down the costs associated with such things like transport and distribution of products therefore making th eir product effective in the market as prices charged on these products are always proportional to the cost incurred in the production process (McClendon & Robinson, 2013). A good example is that increased consumption of automotive products, leads to an increase in demand to order variability in the supply chain which is being amplified as it moves up the supply chain