HP Splitting into two

The illustrious Hewlett-Packard technology firm is going to split into two different companies – one specialized in its computer and printer manufacture, and the other producing its corporate hardware and services. However, is this split completely advantageous? Although the split is aimed at improving HP’s adaptability to the market, the company will lose significant economies of scale and scope. Moreover, the loss of thousands of jobs threatens a major social cost in an economy which seems to have begun recuperating from the 2008 recession.

See if you can identify the different economies of scales and scopes lost, and any other costs. Try and come up with your own evaluation on whether HP should split.

Hewlett-Packard to split into to companies

HP to split

Bigger isn’t better (including other company’s who have split)

– Krish

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Long Term Unemployment

Bit of term 1 recap for Y12s – long term unemployment. Since the recession of 2008, people have found themselves unemployed for long periods of time. This issue is of paramount importance to Governments around the world due to its negative effects on the economy and society as whole.

In order to prevent long term unemployment, Government’s usually provide Unemployment Benefits specifically directed towards these persistently unemployed citizens. Recently, the US Government has delayed the renewal of this benefit, leaving 1.3 million Americans cut off from such aid. This has sparked debate within the Government on whether or not to renew this bill.

Long Time Gone (The Economist), White House Presses Republicans (The Guardian)

– Krish

Old Spice Advertising Success!

Advertising is one of the great ways of shifting out demand i.e increasing quantity demanded for a good. This in turn could increase sales revenue, assuming the P.E.D is elastic (which you could justify with the large amounts of substitutes for body care products). Old spice is here to show you how to pursue a successful campaign!

Here’s an article discussing the success rate of the campaign, which increased sales figure by 107%!

marketing lessons

Why are we all forced to be leaders?

ImageWhether we’re applying for a position of status, or generally talking about attributes of great people – we tend to admire leadership qualities. But why is a leader such a desirable personality? Furthermore, why are we always encouraged to be leaders? Universities’ seem to cherish the idea of a student who is all rounded, but ignorant of those who have a passion and specialize in only one subject i.e the “nerds”. Yet basic economics suggests that specialization in a field is more effective and efficient.

shyness is nice    you are a leader    warwick     you are not a leader

I blame the Market! No wait… the Government!

The Free Market economic system isn’t perfect, and suffers from a variety of different failures eg. Income inequality, demerit goods, environmental issues (negative externalities) . That’s why countries have a Government – to correct these market failures. But hold on! What happens if the Government fails? Who do we point the finger at now? The Market, or the Government?

market and government failure

5 market failures

Krish

Will the economy grow forever?

If economic growth is the increase in the total production of goods and services within an economy, i.e a real percentage increase in GDP – will this growth last forever? After all, we do live in a world with finite resources. More importantly, is this time nearing? How far away are we from reaching the maximum potential of world GDP? Will we always find more efficient methods, or find new renewable sources of basic necessities? 

https://medium.com/mother-jones/319be3f02a36

http://www.forbes.com/sites/learnvest/2013/02/15/why-i-think-the-economy-cant-grow-forever/

http://physics.ucsd.edu/do-the-math/2011/07/can-economic-growth-last/

http://ourfiniteworld.com/2012/04/26/can-we-expect-the-economy-to-keep-growing/

Krish