Debts have occurred simultaneously not only in one market, but also other markets – exposing interdependent and exchangeable functions. Demands start to decline as soon as a job market is frozen and consumers’ debts are rising. What are market-and-consumer-driven demands?
Fundamentally, consumers spend more in a situation they can see a brilliantly shining future – stable jobs and increasingly earning incomes. Investors can allocate funds or money from one less profitable sectors to lucrative and promising sectors at home and abroad. Any economy gets along with its typical patterns of business cycles – ups and downs from a first stage of slow business expansion to a second stage of low sales revenues in businesses, and then going to a third stage of hitting a bottom or dry for a new self-adjustment mechanism of capitals and series of mergers and acquisitions, and gradually moving up to a new cycle of a bull market before reaching a new record of an economic growing peak. Investors and stakeholders in one business firm can gain or loss through five stages of one business cycle. But money and assets are unchanged in terms of values. U.S. dollars can be less attractive and weaker in terms of buying goods and services. But U.S. dollars also behave two opposite roles at home and abroad for an American consumer to buy goods in U.S. or spend in a foreign country on a vacation. If more U.S. companies cut off their workforce sizes, U.S. economy will soon experience more painful sequences. But on the other hand, U.S. investors may anticipate such outcomes so that they have already moved their funds to foreign markets in different diversified investment portfolios with high returns and generous dividends. U.S. government immediately responds with economic stimulus plans of pumping more monetary packages into frozen economic sectors to provoke new demands and supplies. American consumers then hope to get jobs in those sectors to continue their spending behaviors and activities.
When European markets expose to vulnerability of public debts and other financial loss at banks, global investors may wary of European zones and make new investment migrants to other lucrative markets. But markets have consumers who can interact with new policies and new demands. A simple calculation of pumping money into a market to create jobs or demands is used to explore three values:
- Using loans or bonds to add new economic values to a market
- Reinforcing political stability to a society
- Keeping a GDP growing
A public debt can be repaid and zeroed as soon as a government can collect tax revenues from all positive economic activities. A government also expects a secured range or ceiling of a public debt to guarantee all economic functions and national security aspects are achieved or under control. Investors may choose a hedging method to gain a marginal profit or gain by investing on two opposite conditions. A government has alternatives of adding jobs and providing best services to consumers for a near future achievement. In a micro-economic management mode, a business organization has to adjust its attitudes toward two subjects – customers and business processes. A retailer can increase higher sales revenues not by using more high technologies and tools, but approaching and understanding customers’ needs to keep customers going back to stores. Each retailer may choose one of sentimental factors and motives to catch consumers’ attention – Expect more Pay Less or Buy more Pay Less. “Expect more Pay Less” can hold a meaning of buying high-quality goods and paying regular prices. On the other hand, “Buy more Pay less” carries a different meaning of bringing home more goods and paying a same price.
Western governments and investors have praised developing and emerging markets have achieved positive economic growths compared to developed markets being on flat or slightly dipping shapes. But there are more reasons to explain such positive growths in those developing and emerging markets – unseen and unexploited demands and opportunities. Peasants or farmers continue their vanguards of labors to fast-growing and urbanizing cities and towns where demands of cheap and less-skillful jobs are still high. A manufacturing factory can pay less and same salaries for years to hire new employees, while former employees move out to get other jobs. Those companies can also acquire and develop their own disruptive technology advantages at zero or low cost to compete with advanced technology companies in developed markets. Central governments can provide favorable loans to national champion companies to expand abroad by acquiring well-known brands or consolidating small companies into a larger group of companies at home. Wealth is transferred from developed countries to developing and emerging countries. But not all profits come into people in those markets because foreign investors are citizens of developed nations.
Most of business firms have chosen one direction for their sales revenues and market positions. If a company can keep customers going back to use products and services, the former will be able to achieve three goals – stock price, market capitalization and market position. Investors believe on a promising future and buy more stocks or keep their stocks. Investors receive more dividends to raise stock prices by buying options. Trust and satisfaction from customers place a company on a top-ranking list in a market. Asia has more consumers than other continents or markets and also has more low-income consumers who desire to become rich. Such sentiments of motives and dreams fuel a ground-speed of economic growths in each market. When consumers have not experienced other goods and services that are used by other fortunate customers, the former may try to break a self-motivation and self-achievement. China, India, Southeast Asia and others are trying to make their countries be known worldwide. China has invested more in all economic and societal sectors from manufacturing, R&D, education to sport games, defense industry and space programs. Asian consumers have reasons to work harder today in order to become rich in a near future. Such images can explain why more western companies have rushed in to build their factories, offices and joint-ventures in Asia.
Services are created or designed under contemporary demands and projected future demands. Financial products have more derivative products to protect original products. Investors and fund managers are also sensitive to a limited condition of generating profits; therefore, the former needs to design more lucrative and sophisticated products and services. A government always looks out to financial sectors or economic advisers who are also members of financial sectors for new directions. When an economy enters a downturn or recession, politicians and financial experts usually respond by three solutions – liquidizing a market with more money, lowering costs of running businesses by tax breaks and cheap loans, and providing incentives to consumers who can buy more.
All those discussed issues can be used to solve any problem a business organization is encountering. Why a multinational corporation needs to pay hundreds thousand dollar or millions of dollar to seek unique and excellent insights from a consultant firm?
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