economics for business

Individual assignment

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Module Leader: Dr. Richard van den
Berg

Module Tutor: Mrs. Medha Mehta

Module Code: BB4404

Academic year: 2017-18

Kingston University ID: K1748993

Submission Date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr. No.

TABLE OF CONTENT

Page No.

1)

Reference to Article 1: ‘Make in India’ concept on firm ‘The ministry
of AYUSH’.

 

        1.1

Description

 

        1.2

Explanation

 

        1.3

Analysis
Economic tools referred:
a) Foreign Direct Investment
b) Gross Domestic Product
c) Per Capita Income
d) Exports and Imports
e) Production Possibility Frontier
f) Demand & Supply

 

2)

Reference to Article 2: Facebook’s acquisition of TBH application

 

        2.1

Description

 

        2.2

Explanation

 

        2.3

Analysis
Economic tools referred:
a) Horizontal Diversification
b) Market Share
c) Cost
d) Economies of Scope
e) Localization

 

3)

Reference to Article 3: Impact of GST on ‘Shopper’s Stop’.

 

        3.1

Description

 

        3.2

Explanation

 

        3.3

Analysis
Economic tools referred:
a) Goods and Services Tax
b) Input Tax Credit
c) Output Tax (Ad Valorem)

 

 

 

 

 

 

 

 

 

Sr. No

TABLE OF ARTICLE REFERENCE

Page No.

4)

Article 1

 

5)

Article 2

 

6)

Article 3

 

 

 

 

 

 

 

Sr. No.

TABLE OF CITATION

Page. No.

7)

Citations for
Article 1

 

8)

Citations for
Article 2

 

9)

Citations for
Article 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE 1

MAKE IN INDIA CONCEPT APPLICATION ON THE FIRM ‘THE MINISTRY OF AYUSH’

1.1) DESCRIPTION

Indian government has
laid down a reform to ease the business activities known as ‘Make in India’.
The govt. provides incentives to entrepreneurs, start-ups or already existing
firms in every industrial sector to produce within the economic boundaries
which would not only be beneficial for the citizens but also to the overall GDP
of the country because our exports would surplus our imports (consumption) from
foreign players. The analysis of the article would also include how this reform
has helped the Indian economy for foreign direct investment, employment opportunities
for increase in the Per Capita Income.

This article report
is about one such firm under the ‘wellness’ sector known as-‘The Ministry of
AYUSH’.

1.2) EXPLANATION

‘The ministry of AYUSH’ is not only about generating profits. The main
purpose of choosing this article was that AYUSH has
concerns related to escalating costs of conventional health care and the
adverse effects of chemical-based drugs and increasing lifestyle disorders.
There is an epidemiological transition. By the year 2020, non-communicable
diseases (NCDs) are expected to account for seven out of every 10 deaths in
developing regions. AYUSH has the strength in managing NCDs. India has
conducted international exchange programmes, seminars and workshops on AYUSH.
The ‘Country to Country cooperation in the field of traditional medicine’ MOU
has been signed with major countries like Malaysia, China, Trinidad and Tobago
and Hungary and it is in the pipeline with countries like Mexico, Bangladesh,
Sri Lanka, Serbia and Nepal. Ministry of Tourism also promotes AYUSH Systems of
Medicine by organising and participating in various wellness and medical
tourism events and by running publicity campaigns and organising road shows in
the overseas market.

1.3 ANALYSIS

‘The
ministry of AYUSH’ has been granted allowance for 100% Foreign Direct Investment by the govt. of India to drive the growth
of this company and also bring in foreign currency to benefit our Indian
economy. ‘The ministry of Ayush’ has an annual turnover of INR 120 Billion and
this sector is dominated 80% by the micro, small and medium sized enterprises.

The medicinal
products in the market such as health foods, pain balms and digestives,
constitute approximately 75% of ‘The ministry of AYUSH’ segment and this helps
in the growth of Gross Domestic Product
(GDP) of Indian Economy. India is a country where a major chunk of people
are suffering to meet ends and unemployed as well, so ‘The Ministry of AYUSH’
has helped the needy by providing them with a job to do and earn their living.
9,000 units have been engaged in the manufacturing of AYUSH drugs in India, and
this sector has a potential to generate
over 3 million job opportunities for the needy skilled and unskilled
unemployed citizens of India which will help in the increase of Per Capita Income of India. India is a
leader in the exports of Medicinal
drugs in the foreign country which helps to bring in foreign currency in our
economy. India’s production possibility
frontier will also show a rightward shift due to effective and efficient
allocation and use of resources. There is high
demand for ayurvedic indian drugs and are of high value in the foreign
market and for that the supply of
these drugs would be met by increase in it’s production.

 

 

 

ARTICLE 2

FACEBOOK ACQUISITION OF TBH APP

2.1) DESCRIPTION

The article is on the company “Facebook” acquiring “TBH” application.
Facebook is the most widely used social networking site in the world. It has
acquired 64 companies since 2007. The most famous acquisition was Whatsapp and
Instagram and yet very successful. Facebook acquired this newly growing
application named “TBH” (To be honest) on 17th October 2017.

 

2.2) EXPLANATION

TBH app is basically a social messaging platform where the users can
send anonymous messages to each other. These type of applications are basically
made for employees for their feedbacks to the organisations. But facebook saw a
potential in this Application as it gained popularity amongst the teenagers.
This application was launched in August 2017, and it was a massive success for
a start. It featured in the top free charts on the app store with 5million
downloads within weeks and having 2.5million daily users.

 

2.3) ANALYSIS

Facebook noticed potential in this application and considered it as a
competition as well in the long run if it continues to run successfully as an
individual entity so Facebook decided to acquire this App. This sort of
diversification is called ‘Horizontal
diversification’ in which a corporate acquires another company with similar
type of business. As we know, Facebook had acquired Whatsapp at a whooping $19B
which accounted for $40 per user which was quite expensive. This happened
because they got too late in acquiring it and Whatsapp was already a hit by
then. They did not want the same to happen again if TBH became a huge success,
so they decided to acquire it at the earliest, which will help them gain their market share in the social networking
sector. The promoters of TBH app are formally employed in the Facebook
corporation now. Facebook provides them
with funds for upgrading the app time to time, keeping the momentum alive
among the teenagers. It will also provide
elite engineering team so that bugs and app crashes are cancelled out and
the application is user friendly. TBH is going to inculcate a direct messaging
feature, so facebook will help them out in providing
assisstance for weeding out spams with their technology. This is when the ‘Economies of scope’ comes into picture
because facebook does not have to produce another application of their own to
compete with TBH app, but they have teamed up with them which saved them a lot
of their funds. The app hasn’t expanded throughout everywhere in USA as yet,
But with the help of Facebook it will be able to go reach masses and global
platforms as well and adopt different cultures and languages and this concept is known as ‘Localization’.
TBH app has promised to poll only such questions wherein if you pick a friend,
the friend feels good about it, so the application of this function would be
easier with more brains coming into the picture with facebook acquisition for
content moderation.

 

 

 

 

 

ARTICLE 3

IMPACT OF GST ON ‘SHOPPER’S STOP’

3.1) DESCRIPTION

This
article describes the impact of Goods and Services Tax (GST) on a modern retail
firm called ‘Shopper’s Stop’. It is an Indian department store chain owned by
the K Raheja Corp Group, they have 83 stores across 38 cities in India with
clothing, accessories, home furnishing and décor, handbags, shoes , jewelary,
etc. products.

 

3.2) EXPLANATION

The
government of India imposed the Goods and Services Tax (GST) with effect from 1st
July 2017. The tax structure was basically implemented for uniformity in the
type of tax levied throughout the country. It has been levied in 4 different
tax slabs and that is 5%, 12%, 18% and 28%. These slabs have been fixed among
all the goods and services provided throughtout the country on the basis of
necessity. Modern retail shops like ‘Shopper’s Stop’ come under the tax slab of
12%.

3.3) ANALYSIS

The
garments that cost less than INR 1000 per unit were usually imposed a tax of 6%
( 5% VAT and 1% Excise Duty) but now the same unit would be imposed with 12%
tax. Availability of Input Tax Credit (ITC) would partially diminish the impact
of higher GST and the price of garments rose by 3-4% post GST rollout. Shopper’s
Stop is a large vendor and they were ready for GST implementation but the small
vendors were unprepared which led to supply disruptions. Due to this they
stepped up procurement in view of end of season sales and caused disruption in
supplies from small vendors after the GST came into picture. Govt. provided 60%
Input Tax Credit for unsold private label inventory on transition and the
remaining 40% will be levying Ad Valorem ( Output tax invoice will be
available) from the customers. The company did not expect any change in it’s
business model owing to the implementation of GST. The customers would have to
pay more to purchase the same product now due to GST. Shopper’s Stop would be
liable to pay only GST from now onwards which would smoothen their working
process and sales.

 

 

 

 

 

 

 

 

 

 

 

 

 

4)
Article 1

               

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5)
ARTICLE 2

 

 

6) ARTICLE 3

 

 

 

                    

 

 

 

 

 

 

 

 

 

·        
BAHETY, M., AIYA, N. AND DANGAYACH, A.

GST Get, Set, Go

In-text: (Bahety,
Aiya and Dangayach, 2017)

Your
Bibliography: Bahety, M., Aiya, N. and
Dangayach, A. (2017). GST Get, Set, Go. ebook Edelweiss
Securities Limited, pp.7,8,15. Available at: http://www.thehindubusinessline.com/multimedia/archive/03180/GST-GET_SET_GO-JUN_3180273a.pdf
Accessed 25 Jan. 2018.

ABOUT US | SHOPPERS
STOP

In-text: (Shoppers
stop, 2018)

Your
Bibliography: Shoppers stop. (2018). About
us | Shoppers Stop. online Available at:
https://www.shoppersstop.com/aboutus Accessed 25 Jan. 2018.

ANON

List of mergers and acquisitions by Facebook

In-text: (Anon,
2018)

Your
Bibliography: Anon (2018). List of
mergers and acquisitions by Facebook. online En.wikipedia.org. Available
at: https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Facebook
Accessed 27 Jan. 2018.

ANON

Social networks ranked by market share UK 2017 |
Statistic

 Social networking sites ranked according to their
market share

In-text: (Anon,
2017)

Your
Bibliography: Anon (2017). Social
networks ranked by market share UK 2017 | Statistic. online Statista.
Available at:
https://www.statista.com/statistics/280295/market-share-held-by-the-leading-social-networks-in-the-united-kingdom-uk/
Accessed 25 Jan. 2018.

CONSTINE, J.

Facebook acquires anonymous teen compliment app
tbh, will let it run

In-text: (Constine,
2017)

Your
Bibliography: Constine, J. (2017). Facebook
acquires anonymous teen compliment app tbh, will let it run. online
TechCrunch. Available at:

Facebook acquires anonymous teen compliment app tbh, will let it run


Accessed 25 Jan. 2018.

ANON

Home | Ministry of AYUSH | GOI

In-text: (Anon,
2018)

Your
Bibliography: Anon (2018). Home |
Ministry of AYUSH | GOI. online Ayush.gov.in. Available at:
http://ayush.gov.in/ Accessed 17 Jan. 2018.

ANON

WELLNESS – Make In India

 The article and the firm relating to the article 1
of the economics for business individual assignment has been accessed from this
website. It is an authenticated source as this website is under control of the
government of India.

In-text: (Anon, n.d.)

Your Bibliography: Anon
(n.d.). WELLNESS – Make In India. online Makeinindia.com.
Available at: http://www.makeinindia.com/sector/wellness Accessed 25 Jan.
2018.