Economic Theories Applied to the New Economy

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Economic Theories Applied to the New Economy Discuss the extent to which the economic theories in the Market’s Reader can be applied to the “New Economy”. (50 marks) A) Discuss the extent to which the economic theories in the Market’s Reader can be applied to the “New Economy”. (50 marks) In this question, I will define the old and new Economy, then I will mention the main characters of New Economy and what is different between new and old Economy. After that, I will discuss the role of knowledge, innovation, and individual creative and competitive as the primary resource needed to create economic wealth. Then, I will discuss Innovation reduce costs and improve product quality and how advances technology achieve the cost reduction and reserve the economic scale in good level. finally I will Study the Economic theories in market reader, clearifing how it could use and ably in the new economy. It may be helpful to describe the “old economy” before I talk about the “new economy.” From around 1938 to 1974, the economy was built on a manufacturing base geared toward standardized production (It was manual labor) (1). It was organized into stable, hierarchical and generally autocratic organizations. These organizations achieved a competitive edge in the market by making standardized products faster and more economically. They focused on incremental cost reductions and a national marketplace. This is how success and prosperity were achieved in most courtiers, examples of type of organization could be found in textile and steel mills. This economic order began breaking down between the mid-1970s and the early 1990s. The crisis included both textiles and steel in a period of transition from the old economic order to the new one. a lot of countries loss their competitive edge because other countries were making things faster and cheaper. The cheap labor which had brought industries to the South was being very cheap. At the same time, workers also began wanting a higher standard of living, wanting cars, televisions, washing machines, better clothes and homes, wanting a chance to educate their children. Text Box: source: http://www.calumet.purdue.edu/management/hrm_sum.htmlThe new economy is emerging as a knowledge- and idea-based economy. In this new economy, the key to success and prosperity is the extent to which t... ... middle of paper ... ...er design and high prices. The year also marked the company's restructuring of its sales and distribution channels. In addition to the existing structures based on product categories, a new organization was set to be established, that would focus exclusively on mass-retailers, in an attempt to foster close knitted relationships and improve communications with its consumers. The strategies that Sony must continue to pursue are: it must keep itself ahead of the change curve. In order to do so, the company must be able anticipate the direction of the change. Second, it must be able to focus and make the change happen. Also, Sony as a company needs to redefine itself from a business perspective, demonstrating that Sony is a consumer electronics products company, not a gaming company. For the market of consumer electronics is an ever-growing market and will always be significantly greater than the target market for games, which only includes a small segment consisting mainly of children and teenagers. However, from a holistic point of view, Sony should strengthen and maximize the brand value of its core sectors- electronics, games and content (music and picture).

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