I have to select an organization that I am familiar with for a Microsoft PowerPoint Presentation where I have to create a presentation that will be presented to the organization’s Executive Committee. The Organization I would like to use as I am presenting it in a business format would be for the Nike Organization. This presentation has to include detailed speaker notes with proper citations, some economic graphical images that must be properly cited, and must include a minimum of of 3 peer-reviewed sources or more. This presentation has to include to following items:Slide 1-Cover Page Slide 2-Introduction Slide 3-Three Key Facts about Short-Run Economic Fluctuations Slide 4-How the Economy in the Short Run Differs from the Economy in the Long Run Economic Fluctuations Slide 5-Discussion of Aggregate Demand and Aggregate SupplySlide 6-How Shifts Cause Booms and Recessions of Aggregate Demand and Aggregate SupplySlide 7-Impact of Monetary PolicySlide 8-Monetary Policy: Impact on Interest RatesSlide 9-Monetary Policy: Impact on Aggregate DemandSlide 10-How Fiscal Policy Affects Interest RatesSlide 11-How Fiscal Policy Affects Aggregate DemandSlide 12-Evaluation of Why Policymakers Face a Short Run Trade-Off from InflationSlide 13-Evaluation of why Policymakers Face a Short Run Trade-Off from UnemploymentSlide 14-Evaluation of Why Inflation Trade-Off Disappears in the Long Run Slide 15-Evaluation of Why Unemployment Trade-Off Disappears in the Long RunSlide 16-ConclusionSlide 17-Reference Page to Include 3-Peer-Reviewed Sources or MoreFormat consistent with APA guidelines. For peer-reviewed resources, please include direct web links of where information is cited so I can look them up as well. Attached below was a team assignment that myself and other team members had helped research for the Nike Company in my economics class and I would appreciate any helpful feedback I can get on this type of assignment I have and thanks!
the_real_economy_in_the_long_run.docx
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The Real Economy in the Long Run
Team B
(Andrea Markiewicz, Catarino Aguayo, Kimberly Elkins, Slavi Iordanoff & Jocelyn Velazquez)
ECON/372
October 3, 2016
Daniel Puente
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The Real Economy in the Long Run
The Nike Company based in the United States engages in the production of garments for
sporting both genders such as women and men’s running shoes. The company is seeking to
expand its productions to China; many factors get considered when growing a business.
Expansion of business on top of other regions creates a wider market of opportunities for trade
and employment services to the local people around the enterprise. It is important to analyze
critically the situation of economic, political and social areas of the country you seek to expand
your business.
Factors that Determine China’s Productivity
o Political and Economic Stability-The stability situation in the country of
China contributes to its productivity. It promises a better future for
investors since it is free of social unrest or political disparities, rioting and
social turmoil. It provides a favorable environment for economic growth
and investment. Political and economic stability attract investors since
there are no risks of hyperinflation leading to China becoming productive
(Liu & Wang, 2003).
o Availability of Capital-China gains capital from many foreign investors.
This money grows its economic and capital markets both local and
international. The money gets invested in giving better and quality
productions from the country and expanding its market (Liu & Wang,
2003).
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o Developed Infrastructure and Availability of Resources-China develops its
infrastructure such as transport, communication sectors and advanced
technology that facilitate the sale of goods and services. With improved
infrastructure, there are lower costs of production hence generating more
profit. There is the easy transportation of manufactured goods due to
developed roads (Liu & Wang, 2003).
o Availability of Labor-There is an availability of labor and cheap costs.
China has individuals who are skilled and experienced, proficient in
manufacturing, and providing goods and services that can compete
favorably and generate income in global markets (Liu & Wang, 2003).
o Readily Available Local Market and Business Climate-China has a large
population that provides a ready market for its produced goods. This
process stimulates a rise in production within the country. As time passes,
there is maturity and growth in the size of the people and region where
more industries will gain bigger markets with the local environment
industries such as healthcare, technology, and engineering (Liu & Wang,
2003).
How China’s Policies Influence Nike’s Productivity Growth
China is a vast country with a huge economy, but if given the opportunity to partner with
Nike, it would be great for economic growth. Although, before we begin to look at Nike’s
productivity growth in China, we must evaluate China’s policies and see how it would influence
growth. We must consider taxation, political stability, trade regulations, unemployment laws, and
licensing to name just a few of the government policies to study (Williams, 2016). If Nike can
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meet China’s policies, then it will, without a doubt, increase its profits by a wide margin. China’s
economic growth in the last thirty years is unparalleled. As stated by authors Hu and Khan, “The
growth in the country’s stock of capital assets, such as new factories, manufacturing machinery,
and communications systems–was important, as were the number of Chinese workers, a sharp,
sustained increase in productivity……was the driving force behind the economic boom” (Hu &
Khan, 1997). An increase in work efficiency for Nike will put them ahead of their entire
competition and will leave a lot of room for growth.
Country’s Financial System to Key Macroeconomic Variables
The branch of economics that deal with how individuals behave, their decision-making of
the economy, as well as the performance and structure of the economy as a whole opposed to
comparing it on a case-by-case basis is macroeconomics (Harris, 2016). The unemployment rate
would decrease because of the millions of jobs that get offered by Nike and positions that are
continually available because of all of the Nike products that get produced. Some factors such as
consumption, international trade, investment, inflation, savings, and international finance
develop models in macroeconomics that can play a factor. Some of the factors that are studied
and considered to understand the interrelations that involve different parts of a nation’s economy
is their rate of unemployment.
The level of unemployment seems to decrease because of the millions of jobs that are
offered by the Nike company. However, on the other hand, microeconomics appears to be
focused on the behavior of individuals such as consumers and firms and the way that their
behavior determines quantities and prices in specific markets. Macroeconomics can be geared
towards common public goods, have unique characteristics, are considered to be non-divisible if
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products do not diminish the quantity or the quality for air, defense, markets that are stabilizing,
or consumers.
When it comes to economic growth and the financial system, there is a correlation
between the two. The system relates to various macroeconomic variables such as the growth
domestic product (GDP), unemployment rate and inflation. The level of unemployment is a
variable that corresponds to many individuals seeking jobs within a certain salary and is willing
to look for employment in different economic situations. Inflation, calculated by the consumer
price index (CPI), is the rise in prices of goods and services within a country. The changing
value of money over time inflicts high prices in the market since with the increase in inflation;
the money loses its value. The other variable that alludes to the full value of services and
products manufactured in a country within a time period of a year is growth domestic product
(GDP). Both these variables relate to the country’s financial system since they directly affect the
economic growth, the source of income, and the finances (Hosseini, Ahmad & Lai, 2011).
Reducing the Risk of Relocation for Nike
When a large company is looking to expand into a different economic and cultural market
in an entirely different part of the world, it can be very challenging, but certain things can be
done to make the transition a smooth one. In the case of Nike integrating into the Chinese
market, it should be done very carefully because shoes and clothing are an essential part of any
culture and the product offerings must fit in with the Chinese cultural trends. This process
means that the traditional clothing and shoes of the Chinese people should be studied and Nike
will need to adapt some of its products to meet the wants of the citizens. Nike should also
attempt to establish itself as a local entity rather than a corporate giant. We as a team want to
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make an emotional connection with the new market (Rasila & Nenonen, 2008). It is also
essential to understand the current economy in China to understand how much the average
consumer has to spend on the products that Nike will be offering. There is a need to understand
how the country is developing and figuring out what areas will have a higher demand based on
financial status. Also, there will most likely be future risk involved, so it is wise to develop an
exit strategy. In case things don’t go as planned, there should be a solid plan strategy to leave the
market with minimal losses.
Current and Projected Unemployment for the Next Five Years
Many factors can lead to a country’s unemployment rate raising or lowering. China has
been close to their higher unemployment rate in the past three years. January 2014 to January
2015 being at 4.1 percent unemployment rate and now in September 2016, the unemployment
rate for China is at 4.05 percent (Trading Economics, 2002-2016). China has remained to have a
somewhat constant unemployment rate overall in the past five years. One of the larger issues
with China that is causing unemployment is that the positions that are available in certain
workplaces are highly skilled positions, whereas the unemployed individuals seeking work are
not skilled in those specific areas.
The forecasted unemployment rate for China over the next five years is seen to sit right
around the five percent rate. Unfortunately, there seems to be a projected higher unemployment
rate because the job market is slowing down at a steady rate, causing companies in China to have
to let go of workers as well as find workers who can perform more than one task, meaning they
need various skills for some positions. Although there will be some change in China’s
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unemployment rate, it is not a significant difference overall and can get managed with specific
salary cuts as well as opening job positions.
Conclusion
Overall, relocating a company to another country can be challenging especially for bigger
companies such as Nike. China is growing its economy and attracts most investors who similarly
trade their expertise in various industries. Relocating Nike to China in seeking a successful
expansion is best for the organization. The economic status of China is good comparing the
variables and the financial position. The factors determining China’s productivity are
encouraging for investments and provide a favorable environment for relocation.
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References
Harris, A. (2016). Macroeconomic Variables. Retrieved from
http://www.auburn.edu/~gadzeat/macro-variables.htm
Hosseini, S. M., Ahmad, Z., & Lai, Y. W. (2011). The Role of Macroeconomic Variables on
Stock Market Index in China and India. International Journal of Economics and Finance, 3(6),
233. Retrieved from http://ccsenet.org/journal/index.php/ijef/article/viewFile/12704/8880
Hu, Z. & M.S., Khan. (1997). Why Is China Growing So Fast? International Monetary Fund.
Retrieved from http://www.imf.org/EXTERNAL/PUBS/FT/ISSUES8/INDEX.HTM
Liu, X., & Wang, C. (2003). Does Foreign Direct Investment Facilitate Technological Progress?
Evidence from Chinese Industries. Research Policy, 32(6), 945-953. Retrieved from
https://www.researchgate.net/publication/222170845_Does_foreign_direct_investment_facilitate
_technological_progress_Evidence_from_Chinese_industries
Mafi-Kreft, E. (2015). International Outlook for 2016. Indiana Business Review, 90(4), 1-3.
Retrieved from
http://search.proquest.com.contentproxy.phoenix.edu/docview/1771698685/2ED32D541D86460
7PQ/9?accountid=35812
Rasila, H. M., & Nenonen, S. (2008). Intra-Firm Decision-Maker Perceptions of Relocation
Risks. Journal of Corporate Real Estate, 10(4), 262-272,304-305. Retrieved from
http://search.proquest.com.contentproxy.phoenix.edu/docview/233416830/74F3889251184D68P
Q/1?accountid=35812
Trading Economics. (2002-2016). China Unemployment Rate. Retrieved from
http://www.tradingeconomics.com/china/unemployment-rate
Williams, F. (2016). The Effects of Government Policy on Business. Chron. Retrieved from
http://smallbusiness.chron.com/effects-government-policies-businesses-65214.html
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