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Market Research on procurement in the goods category (Gas Product)
Practitioner Corporate Award
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Executive Summary
Market research in procurement and pricing is an essential area of study to enable businesses set prices for their products based on the existing market factors. This research will cover some areas essential for setting prices of different products in a market with the natural gas as the selected product for this research. The paper will analyze the market by studying the demand-supply factors and heir relationship with the price of the commodity.The other areas of this research are the current pricing mechanism for a product and the factors affecting the pricing methods. The research paper will also give the analysis of prices and the mechanisms of setting them to help people understand the trends in various markets.
Practitioner Corporate Award
Market Research on procurement in the goods category (Gas Product)
Introduction
Gas is a substance that is common in our day to day life especially in our homes, schools, and industries. Gas has many uses, such as cooking, in vehicle tyres, in cleaning, and in air balloons. This paper will analyse the market for the gas production particularly from the petroleum products. The research will deal with gas products and analyze the nature of its market on pricing, demand and supply and the extent of the market. Through this research, several issues, such as pricing and anything that has some effect on the prices of commodities will be of great importance.
Market research on gas products
Natural gas is a very important resource has many uses in both the public and the private sector, especially as a fuel. The market for gas products such as gasoline is very wide, and many industries use the fuel to run their machines and propel engines of some locomotives and aeroplanes. The number of the consumers for the product is very high in comparison to the producers, which makes it enjoy a very big market worldwide. Some of the products are hydrogen, oxygen, and methane produced by fractional distillation in the gas and oil refineries. The producers sell the product to big manufacturing industries, transport industries, and electricity production industries.
There is a lot of competition for the gas products that pushes the prices very high for some consumers. There are very few countries with natural gas deposits such as the Saudi Arabia and some Middle Eastern countries. The competition for the commodity pushes the prices up making it unaffordable for the low-income earners. The many uses of the gas such as cooking and propelling locomotive causes stiff competition in the gas market. The procurement exercise for the gas products is long since it has to come from the gas producing countries there is stiff competition among the gas manufacturing companies for the gas market all over the word. Many companies merge and sell their product under one name because of the high level of competition.
Demand and supply factors on the gas product
The factors influencing demand and supply are
The product’s price (Gas)
The market price of the natural has a big effect on the amount bought and supplied by the market since an increase in price encourages the suppliers to supply more. The potential buyers are few when the market price is very high, where many cannot afford the product. However, many gas sellers will not be willing to sell their products and may decide to hoard them.
The prices of similar products
Research shows that a decrease in the price of the crude oil for production of fuels may lead to the high demand for the natural gas products. The gas and the oil products can replace one another, such that one can by oil and leave the as depending on their prices. If the prices of the other similar products increase more than the gas, many buyers will buy the gas products increasing its demand and supply.
Government Policies
The government of the gas producing countries many limit the amount of gas the companies should supply to the marked reducing its supply.
Changes in the level of incomes
Incomes determine the type f the fuel people use in their houses, which means that if people have high income, they tend to buy more of it increasing the demand for the gas. When the people’s incomes are low, they tend to go for the cheaper fuels reducing the demand for the product.
The consumers’ tastes and preferences
Some consumers may prefer using the other products such as paraffin for fuels to gas, which will lower the demand for the gas. In other cases, people may favour the use of gas, which will increase it demand and consequently the supply.
The number of consumers for the product and the population
A commodity may have a large number of consumers favouring it, which tends to raise its demand. If a large population uses natural gas for cooking, its demand will be very high compared to when a few people in a certain country uses it..
Future expectations
Consumers may expect the prices of the gas products to go up, making them buy more of it at that time. The demand for the gas will decrease if the buyers hope for lower prices in the future and increase if they suspect that the prices might rise. If the sellers expect the prices to drop, they flood the market with the product, and if they predict a rise in the price, they hoard the product until that time.
The current pricing mechanism for the gas product
There are different means of setting prices for the product to come up with the best price for it. Some of them are
Government policy
The policies of some governments limit the amount of goods imported through various means such as quotas and bans. The government may set prices for the natural gas products depending on their policies, or it may impose a tax that will need upward adjustments to the price of the gas in that country. Some ways of controlling prices are taxation, subsidies, and quotas, which can either raise or lower the price of the product.
Bargaining
Some buyers try to negotiate the prices through haggling to see whether the supplier will lower the price. If the two do not strike a viable price for the product, the seller retains his/her item. The method is mostly for durable goods, which cannot go bad quickly in case the seller does not find a potential buyer.
Tendering
Tendering is a process where the buyers quote their prices for the commodity and present them sealed to the procurement committee. Once opened, the supplier who bids the lowest supplies the goods and the buyer who quotes the highest price buys the goods.
Auction
Auction involves buyers quoting different prices in the open until there is one, who quotes the highest price. The method involves suggesting of prices until the seller gets the best price for the commodity, after which he/she seals the deal with the highest bidder. Items sold by this method are houses, parcels of land, and machinery.
Factors that impact on the pricing of the product
A number of issues determine the pricing of commodities, such as the environment, which constitutes the presence of distribution channels, inflation, and the government role. The other factor is the size and the type of the enterprise, such as whether it will supply enough, promotion, and delivering costs. Another factor is the prospect characteristics, which defines the perception of the product, market trends, and awareness.
Conclusion
In conclusion, procurement is a very important area in any business and other organizations. The named product has a big market in the world with the producers of the gas exporting large volumes to the countries without gas deposits. Demand and supply are very important issues as they affect the nature of the market through the different factors that shape them. The current pricing for various product includes bargaining, tendering, auction, and the government policy. The factors that impact on the pricing are the environment, the enterprise size, he market type and the prospect. There is the need for some research on this area o find out the importance of procurement in the business world.
Abraham Lincoln was born in April 12th, 1809 in Hardin County,
Abraham Lincoln was born in April 12th, 1809 in Hardin County, Kentucky. He grew up to be the 16th president of the United States. Lincoln is remembered as the emancipator of slaves in an era where slavery was the norm. He came from humble beginnings and managed to rise to the highest rankings in the land. His parents were Thomas Lincoln and Nancy Hanks Lincoln. He had two siblings, Sarah and Thomas but his brother Thomas died in infancy. Tragedy followed the family as his mother died when Abraham was nine years old from milk sickness. His father remarried to a widow who had three kids of her own and relations between Abraham, and his father became strained as a result (Thomas 53). He, however, had a strong bond with his stepmother.
Abraham spent many years gaining a formal education, mostly encouraged by his stepmother. His efforts culminated in him gaining knowledge in law and getting admitted into the bar of the state of Illinois. After working as a lawyer and making a good living, he tried his hand in politics and served one term in the House of Representatives. He was an influential critic of the Mexican American war, and his views made him unpopular at home. He returned to practicing law and had many lucrative cases.
His views on slavery were born when he was a member of the Illinois state legislature in 1834. He did not oppose slavery for any other reason other than that it was a hindrance to economic development. In 1854, the Kansa-Nebraska Act was passed by Congress to allow individual states the ability to decide whether to allow slavery or not (Foner 5). This act was the birth of the Republican Party by members who violently opposed the law.
Abraham Lincoln believed in the equality of all men. This view was further challenged by the judgment of the Supreme Court in 1857 declaring African Americans as noncitizens of the United States who thus did not have any inherent rights. Lincoln decided to vie for a senatorial seat and won. In his acceptance speech, he declared that the Supreme Court had promoted slavery and division in the nation (Randall 15).
In 1860, Lincoln was elected a president based on his views concerning slavery, protective tariffs and support for the development of infrastructure. It is however for the emancipation of slaves that Lincoln is most remembered. He famously declared that “those who deny others freedom, deserve it not for themselves.” On the first day of January in 1863, Lincoln delivered the Emancipation Proclamation that diverted the cause of the Civil War from saving the Union to the more just purpose of abolishing slavery. As a result of the proclamation, all people who were held as slaves in states that were rebellious would be free henceforth.
His most famous speech and perhaps the most critical speech in all the history of this nation was delivered by Lincoln in Gettysburg. In this speech, he emphasized the importance of equality and the abolition of slavery over just the protection of the Union. The words of the constitution had to be carried out by the people of the day to ensure that “government of the people, by the people, for the people, shall not perish from the earth.” He was a champion for the equality of human rights and ensured that the abhorrent practice of slavery was done away within the United States (Randaal 23). The assassination of Abraham Lincoln in 1865 was a significant loss to the country as his visionary leadership was just what the world needed.
Works Cited
Foner, Eric. “The Fiery Trial: Abraham Lincoln and American Slavery.” The Chautauqua Journal 2.1 (2018): 5.
Randall, Willard Sterne. Leadership Lessons: Abraham Lincoln. New Word City, 2017.
Thomas, Benjamin P. Abraham Lincoln: a biography. SIU Press, 2008.
Business and Economic Review
Business and Economic Review
In my opinion, the assertions about TikTok and some other tech companies cannot be fully reliable. Of course, tech companies can pose a severe threat to national security; however, the plan is primarily orchestrated to economically sabotage Chinese technological innovations to allow money leakages back into the United States (“Trump Effort to Keep U.S. Tech Out of China Alarms American Firms”, 2020). Some crucial personal information is left on the internet servers, and some criminals might steal this data and use it to conduct criminal activities. The government has every right to protect its citizens and organization concerning the matters of national security. Some privacy that can be invaded includes personal emails, photos, work information, and cell phone contacts, as they are left exposed on the internet and can be used for fraudulent activities.
I do not think that banning the technology if the parent company refuses to sell the operations to US firms will resolve anything. I believe foreign companies should be given fair opportunities and treated similarly to how the United States corporations operating abroad, provided they comply with the rule of law. The parent company is well equipped to managing whatever technology it has invented as opposed to force-selling in the US firms. Perhaps, they might be forced to sell it, and since they are the one who created it ends up compromising the same data, the United States government are trying so hard to protect. TikTok has done quite a lot proving how more transparent their operations and practices are while playing so hard to disregard any association with Beijing, where sweeping national security law enacted by the Chinese government was made effective most recently (“Trump Effort to Keep U.S. Tech Out of China Alarms American Firms”, 2020). TikTok global head of security vowed that the app is committed to maintaining robust security practices. It has always practiced that, even allowing outside firms to conduct audits on its technology.
There are two main methods for strictly regulating services importation, namely, through quota systems and tariffs. Through a quota system, the United States government can limit the number of foreigners or rather the minority groups entering the US every year while also limiting their numbers in business firms as per the policy document. When the United States imposes a quota to those Chinese tech firms, it will restrict their trade operations, limiting the monetary value of product services that the United States is importing while allowing such firms to operate in our country. In other words, quotas work to boost domestic production at the foreign output expense by restricting foreign competition (Rodrik, 2018). As it is commonly known, foreign corporations are subject to paying a massive amount of taxes. If the United States decides to ban the TikTok company, it will be losing some enormous sums of revenue needed for the economic gains of our country. Similarly, a relatively high number of jobs will be lost in banning TikTok.
Tariffs significantly hamper the economic growth in a given country as it raises prices and reduces services available to the consumers (Rodrik, 2018). TikTok can be forced to pay a massive amount of taxes to operate in the United States, making their operations difficult and even cutting down their revenues. On economic terms, imposing tariffs and strict trade policies lead to a substantial drag in the country’s economy (Rodrik, 2018). Taxes impose costs that extend beyond the direct price of a dollar increases on targeted goods and services. When it comes to US services, the introduction of tariffs might translate to domestic producers’ financial gains since their production is made relatively more competitive than imports. It also leaves the citizens who cannot afford local services more vulnerable to economic disadvantages as import services are relatively lower.
By selling TikTok, it means that the United States government is trying hard to prevent Chinese tech firms from dominating in advance technologies to protect American tech companies. If the parent company for TikTok eventually sells it to American firms, all the money will now be in the United States’ hands, and there will be no money leakages. TikTok may be a revenue source to the United States, but more money is plowed back to China. Through selling will significantly boost the American economy. However, if they decide not to sell but rather be banned in the US, the United States will be losing revenue. In my opinion, it not worth gambling to restrict this trade since it is already a source of income for our government. The government should not only think of short-term goals but even plans. Perhaps, if restriction happens, some foreign investors might be scared to invest in the United States.
As the presidential advisor, I would advise the president to force the parent company for TikTok to sell the technology to American firms because this technology company is currently performing well in terms of profitability than several Silicon Valley tech companies . In 2019, TikTok pulled close to $3.6 billion in profits, based on Bloomberg reports. These figures are far much better than companies like Twitter, who recorded a profit of $1.5 billion or even Snapchat that are currently undergoing losses. The business will serve to protect domestic industries from remaining in a competitive technological edge as China continues.
References
Rodrik, D. (2018). What do trade agreements really do?. Journal of economic perspectives, 32(2), 73-90.
Trump Effort to Keep U.S. Tech Out of China Alarms American Firms. Nytimes.com. (2020). Retrieved 7 October 2020, from https://www.nytimes.com/2020/02/16/business/economy/us-china-technology.html.