< All Topics

IIBMS – Resource prices

Case 2: Resource Prices

IIBMS – Resource prices

As we saw in Chapter 1, resources such as labour, technology and raw materials constitute inputs into the production process that are utilised by organisations to produce outputs. Apart from concerns over the quality, quantity and availability of the different factors of production, businesses are also interested in the issue of input prices since these represent costs to the organisation which ultimately have to be met from revenues if the business is to survive. As in any other market, the prices of economic resources can change over time for a variety of reasons, most, if not all, of which are outside the direct control of business organisations. Such fluctuations in input prices can be illustrated by the following examples:

●Rising labour costs – e.g. rises in wages or salaries and other labour-related costs (such as pension contributions or healthcare schemes) that are not offset by increases in productivity or changes in working practices. Labour costs could rise for a variety of reasons including skills shortages, demographic pressures, the introduction of a national minimum wage or workers seeking to maintain their living standards in an inflationary period.
Rising raw material costs – e.g. caused by increases in the demand for certain raw materials and/or shortages (or bottlenecks) in supply. It can also be the result of the need to switch to more expensive raw material sources because of customer pressure, environmental considerations or lack of availability.
Rising energy costs – e.g. caused by demand and/or supply problems as in the oil market in recent years, with growth in India and China helping to push up demand and coinciding with supply difficulties linked to events such as the war in Iraq, hurricanes in the Gulf of Mexico or decisions by OPEC.
● Increases in the cost of purchasing new technology/capital equipment – e.g. caused by the need to compete with rivals or to meet more stringent government regulations in areas such as health and safety or the environment. As the above examples illustrate, rising input prices can be the result of factors operating at both the micro and macro level and these can range from events which are linked to natural causes to developments of a political, social and/or economic kind. While many of these influences in the business environment are uncontrollable, there are steps business organisations can (and do) often take to address the issue of rising input prices that may threaten their competitiveness. Examples include the following:
Seeking cheaper sources of labour (e.g. Dyson moved its production of vacuum cleaners to the Far East).
Abandoning salary-linked pension schemes or other fringe benefits (e.g. company cars, healthcare provisions, paid holidays).
Outsourcing certain activities (e.g. using call centres to handle customer com-plaints, or outsourcing services such as security, catering, cleaning, payroll, etc.).

● Switching raw materials or energy suppliers (e.g. to take advantage of discounts by entering into longer agreements to purchase).
Energy-saving measures (e.g. through better insulation, more regular servicing of equipment, product and/or process redesign).
Productivity gains (e.g. introducing incentive schemes).
In addition to measures such as these, some organisations seek cost savings through divestment of parts of the business or alternatively through merger or takeover activity. In the former case the aim tends to be to focus on the organisation’s core products/services and to shed unprofitable and/or costly activities; in the latter the objective is usually to take advantage of economies of scale, particularly those associated with purchasing, marketing, administration and financing the business.

Case study questions

1. If a company is considering switching production to a country where wage costs are lower what other factors will it need to take into account before doing so?

2. Will increased environmental standards imposed by government on businesses inevitably result in higher business costs?

IIBMS – Resource prices

At Global Study Solutions, we take immense pride in our ability to offer specialized support to students pursuing various programs at IIBMS (Institute Indian Institute of Business Management & Studies). Our dedicated team comprises experienced professionals who excel in crafting precise and well-researched solutions for assignments and case studies across different disciplines and courses.

Our commitment to aiding students in achieving academic success aligns perfectly with the educational standards upheld by IIBMS Institute (Institute Indian Institute of Business Management & Studies). We understand the importance of delivering high-quality, customized solutions that meet the unique requirements of assignments and case studies within the institute’s curriculum.

Whether in MBA, EMBA, GMS, DMS, or any other programs offered at IIBMS Institute (Institute Indian Institute of Business Management & Studies), our team is equipped to provide expert guidance and meticulously crafted solutions. We prioritize accuracy, originality, and timely delivery; ensuring students receive the necessary assistance to excel academically.

We are dedicated to fostering an environment of academic excellence and providing dependable support to the esteemed students of IIBMS Institute (Institute Indian Institute of Business Management & Studies).

Get expert assistance with your IIBMS Institute (Institute Indian Institute of Business Management & Studies) assignments and answer sheets from our professional academic writing services.

Our team specializes in supporting students with IIBMS Institute (Institute Indian Institute of Business Management & Studies) coursework, ensuring top-notch answer sheets and comprehensive solutions.

Ace, with our tailored assistance, your IIBMS Institute exams, offering precise guidance and accurate answer sheet preparation.

Seeking reliable help for your IIBMS Institute studies? Trust our academic writing services for meticulously crafted answer sheets and exceptional support.

Score high in your IIBMS Institute assessments by availing our expert aid in preparing comprehensive and well-structured answer sheets.

IIBMS Institute (Institute Indian Institute of Business Management & Studies) assignments, solved papers, and study materials are available through our academic writing services.

Seeking assistance with IIBMS Institute coursework? Our professional team delivers accurate and timely solutions for all your academic needs.

Our specialized academic writing support simplifies access to IIBMS Institute (Institute Indian Institute of Business Management & Studies) question papers and model answers.

Need expert guidance for your IIBMS Institute assessments? Our service offers comprehensive solutions for students seeking assistance.

Our academic writing services ensure precise and high-quality answers for IIBMS Institute assignments, aiding students in their educational journey.

Academic writing professionals play a crucial role in assisting students with their university assignments, striving to achieve several key goals:

Quality Assurance: Their primary aim is to deliver high-quality content that meets academic standards and fulfills the requirements of the university assignments. This involves thorough research, proper structuring, and adherence to guidelines provided by the educational institution.

Originality and Plagiarism-Free Content: Professionals in this field emphasize originality by creating authentic content free from plagiarism. To maintain academic integrity, they ensure that all information is appropriately cited and referenced.

Meeting Deadlines: Timely submission is a significant goal for academic writing professionals. They work within specified deadlines to provide students with completed assignments, enabling them to submit their work punctually.

Clear and Coherent Communication: Professionals strive to convey complex ideas in a clear, coherent, and academically appropriate manner. They focus on effective communication to ensure the content is easily understandable to the target audience.

Supporting Learning and Comprehension: Beyond completing assignments, academic writing professionals aim to support students’ learning by providing explanations, analysis, and additional resources that help students grasp the subject matter more comprehensively.

Customization and Client Satisfaction: They tailor their services to individual student needs, providing personalized assistance and ensuring client satisfaction by addressing specific requirements and preferences.

Continuous Improvement: Academic writing professionals continuously update their knowledge base, research techniques, and writing skills to adapt to evolving academic standards and deliver the best possible support to students.