Describe about the Economics for Business of Appropriate Business Ideas.
Economics for Business is a subject that helps to observe and analyse the economic outcomes of an activity from the point of view of economists. The study of Economics of Business helps to analyse the benefits and issues related with a strategy that helps in proper decision making. The paper has been developed to answer two questions on the perspective of economic outcomes of two major activities. The study explains the impact of technology on the newspaper sales and police crackdowns on illicit drugs in the Northern Territory. Furthermore, the study recommends innovative ideas that can be helpful in making appropriate decisions while implying new strategies.
The digital media such as the internet has entirely destroyed the revenue structure of printed newspapers all over the international market. According to the World Association of Newspapers, the stiff challenges of the conventional printed newspaper industry are not restricted in the US or UK markets. Due to digital media, traditional newspapers have vanished half of their classified Print and Advertising revenue. In the current scenario of modern technological efficiency, sales of the newspaper have been falling radically over the last two decades (Marshall, Moncrief, Rudd, & Lee, 2012). Through the identification of the primary drivers leading to the situation, as an Economists standpoint, some instrumental discussions have been argued to the Board of Directors of ABC Newspaper. Meanwhile, the discussion and the economics for the current business scenario can be utilised to deliver significant advice to be followed by the newspaper agency.
Figure: Print Revenue versus Online Revenue
Source: (Mazzoleni & Vigevani, 2013)
In the current business scenario, a graph can be shown to the Board of Directors to identify the comparison of print revenue and online revenue generated in the contemporary markets. Meanwhile, since 2000, the print media revenue has been continuously declining against digital revenue. In the year 2000, the revenue generated by print media such as newspapers were recorded to be more than $65 billion whereas in 2013 the figure has touched as low as below $20 billion (Schrape, 2013). Conversely, the online revenue has explored the market at a robust pace. As a result of the decline of the sales, the print media advertising revenue has been decreased considerably in the past decade or so (Rodman, 2008). Therefore, looking at the demand perspective of the global buyers, the newspaper circulation must be reduced so that the cost of production can be manageable to some extent.
Figure: Number of Newspaper Firms
Source: (Mazzoleni & Vigevani, 2013)
On the other hand, in the last decade and a half, the number of newspaper firms has also been declined drastically due to the revenue decline in print media advertising. Meanwhile, in 2000, there were around 6200 newspaper firms wherein 2013, the revised figure showed 4500 newspaper firms operating in the market area. Through the understanding of the headwinds in the print media advertising, the Board of Directors of ABC Newspaper must be advised to improvise at the e-Newspaper to manage the target demographics popularity (Mazzoleni & Vigevani, 2013). Moreover, by reducing the circulation of the newspapers, ABC Newspaper should target to stop the newspaper printing in the upcoming decade or so concentrating primarily on electronic media.
Figure: Broadsheet newspaper circulation
Source: (Speck & Elliott, 2016)
On the commercial propagation, a review of the broadsheet of newspaper circulation of the biggest market operators must be presented to the Board of Directors to make a realistic decision. The above figure has been given to show the dismal broadsheet of newspaper circulation of the most popular newspapers around the international market. Significantly, all of the favourite newspapers have shown a decline in newspaper circulation since 2007. By considering the poor market performance of the biggest market players of the newspaper industry, the Board of Directors must be advised to consider the conventional newspaper as one of the sources of news to promote electronic media to the target demographics at a reasonable pricing (Kaiser & Song, 2009). The online e-paper of ABC Newspaper may find a massive number of subscribers as the online readers will find interest in the electronic copy following the demand trend.
Figure: Time Spent versus Ad Spending on different Media
Source: (Schrape, 2013)
Despite the global heritage of newspaper, the modern social public has seemed to be spent more time on the internet platform. Herein, a graph has been specified to identify the time spent and advertising spending on different media in recent times. Surprisingly, the internet has been identified as the most profitable resource as 38% of the time has been spent by the public on the internet platform. Also, the advertisement spent has been upgraded to 8% in the same section. Conversely, the newspaper has shown the largest downside as social people have spent merely 8% of the time with newspaper. As a result, the advertisement spent has been reduced to 20% in the same media. Hence, from an economist’s standpoint, the Board of Directors must be suggested to identify the endless opportunities in the e-marketing so that the organisation can increase their profitability through the online advertising resources (Yu, Qi, & Zhao, 2013).
Under the given scenario, being realistic, the sales of the newspaper cannot be increased due to the presence of the internet platform. The reading trends and distribution of news have created significant headwinds for the conventional newspaper agencies (Cameron & Haley, 2012). Therefore, on the basis of the business economics and demand perspective, e-Newspaper must be highlighted reducing the circulation of printed form of the news. In this way, the cost of production will be reduced by a significant margin.
Police Crackdowns are used to cut the supply of illicit drugs by reducing criminal and dealers overload. It has been found through research that in maximum cases there is a negative impact of the police crackdown that leads to increase in drug-related violence, murder and gun crime in a region (Engs & Mulqueeny, 2013). Hence, the study has been developed to analyse the effect of increase police crackdown on illicit drugs and the health awareness programs along with increase penalties on use of illicit drugs over the Northern Territory. In order to proceed with the study, it is important to keep in mind that the demand of illicit drugs is assumed to be perfectly inelastic (Goodman & Moynihan, 2012). Hence, the study presents the impacts using theoretical concepts and facts from previous researches.
Increased police crackdowns on illicit drugs leads to fall in the number of dealers for a short span of time. But, due to perfectly inelastic demand of illicit drugs, the arrested drug dealers are replaced by new competitors in the long run. Hence, a negative impact can be evident due to increased crackdowns of police (Milmo, 2010). The effect of increased police crackdowns on illicit drugs are discussed herein below:
Positive Impact
The police of Northern Territory will take action against the drug dealers and agents. This will reduce the supply of illicit drugs in the region leading to rise in the price (Rowe, Wiggers, Wolfenden, & Lynn Francis, 2010). A diagram has been presented below for better understanding.
Figure: Demand and Supply of Illicit Drugs in the Short Run
Source: (Cooper, Moore, Gruskin, & Krieger, 2015)
It can be seen that the supply falls in the short run from S1 to S2 due to decline in the number of dealers. It leads to rise in the price of illicit drugs in the Northern Territory from P1 to P2.
Negative Impact
It is expected that the number of dealers will be replaced by new competitors due to high rate of profitability because of the increase in price. Furthermore, there will a gang war to replace the older position of the dealers (Scott, 2004). Furthermore, the drug dealers will be ready to pay penalties to seek high profitability from the illegal business. A diagram has been presented for better understanding.
Figure: Demand and Supply of Illicit Drugs in the Long Run
Source: (Cooper, Moore, Gruskin, & Krieger, 2015)
It can be seen that due to fall in supply, the demand will increase at a higher pace that will further promote the price of illicit drugs in the territory. Hence, new dealers will replace the older ones to seek high profitability. Hence, it can be expected that the crime rate will increase in the long run.
The health awareness programs will help to educate the population of Northern Territory about the serious health problems related to illicit drugs. Hence, it will make the young generation and new potential buyers aware of the fact that will control the increasing demand for the illicit drugs in the region (Wood, 2004). Furthermore, the increased penalties for illicit drug use will also help to control the demand in the market (Atkinson, 2013). Hence, these two strategies can be used to control the demand of illicit drugs in the Northern Territory. But, it will have certain negative impact over the government that is discussed herein below:
High expenses: The government of NT needs to spend high amount of money on the resources that are used to increase the police crackdowns on illicit drugs. Along with that, there is a need of huge fund to conduct the health awareness programs (Scott, 2004). Hence, the strategies to reduce illicit drugs dealings in the region will cost the government with a high amount of money.
Impact on the rest of the criminal justice system: The crackdowns lead to increased workload over the other departments of the government. Hence, the offenders are offered with lenient sentences in place of high investigation (Wood, 2004). Furthermore, the crackdowns force the other prisoners and cases out of the system.
Opportunity Cost: It is important to note that allocating larger resources to stop crime in one sector will increase the level of crime in other fields. For example, crackdowns on illicit drugs will increase murders and gun crimes. Hence, the increased allocation of resources to stop illicit drugs will have opportunity cost over the government (Scott, 2004).
Impact on Police Community relations: The increased crackdowns negatively impact the police-community relations that may lead to a civil war in the region. It is the primary reason for urban riots.
Hence, it can be seen from the above analysis that increase crackdowns on illicit drugs increases crime and have negative effects over the NT government. Hence, there is a need of proper cost analysis before implementing new policies in the region.
Conclusion
Under the existing circumstances on the basis of given scenarios, the Board of Directors of ABC Newspaper must identify the role of e-Newspaper to improve the sales of the newspaper. Moreover, in order to improve the revenue figures of the agency, online advertising must be inevitable. In case of the second scenario, understandably, there will be both negative as well as position effect of police crackdown. Meanwhile, such regime can influence the prices of drugs to move upwards. At the same time, increase crackdowns on illicit drugs increases crime and have negative effects over the NT government as well.
References
Atkinson, L. (1993). Aboriginal Youth, Police and the Juvenile Justice System in Western Australia.Children Australia, 18(01), 14-19. https://dx.doi.org/10.1017/s1035077200003278
Cameron, G. & Haley, J. (2012). Feature Advertising: Policies and Attitudes in Print Media. Journal Of Advertising, 21(3), 47-55. https://dx.doi.org/10.1080/00913367.1992.10673375
Cooper, H., Moore, L., Gruskin, S., & Krieger, N. (2005). The impact of a police drug crackdown on drug injectors’ ability to practice harm reduction: A qualitative study. Social Science & Medicine,61(3), 673-684. https://dx.doi.org/10.1016/j.socscimed.2004.12.030
Engs, R. & Mulqueeny, K. (1983). A survey of drug use and attitudes toward drugs among male law students and police trainees in Queensland, Australia: A research note. Journal Of Criminal Justice, 11(1), 57-66. https://dx.doi.org/10.1016/0047-2352(83)90098-3
Goodman, A. & Moynihan, D. (2012). The silenced majority. Chicago: Haymarket Books.
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Marshall, G., Moncrief, W., Rudd, J., & Lee, N. (2012). Revolution in Sales: The Impact of Social Media and Related Technology on the Selling Environment. Journal Of Personal Selling And Sales Management, 32(3), 349-363. https://dx.doi.org/10.2753/pss0885-3134320305
Mazzoleni, G. & Vigevani, G. (2013). Mapping digital media. London: Open Society Foundations.
Milmo, C. (2010). Crackdowns on drug dealers led to rise in violent crime, study finds. The Independent. Retrieved September 2016, from https://www.independent.co.uk/news/uk/crime/crackdowns-on-drug-dealers-led-to-rise-in-violent-crime-study-finds-1955131.html
Rodman, G. (2008). Mass media in a changing world. Boston: McGraw Hill.
Rowe, S., Wiggers, J., Wolfenden, L., & Lynn Francis, J. (2010). Establishments Licensed to Serve Alcohol and Their Contribution to Police-Recorded Crime in Australia: Further Opportunities for Harm Reduction*. Journal Of Studies On Alcohol And Drugs, 71(6), 909-916. https://dx.doi.org/10.15288/jsad.2010.71.909
Schrape, K. (2013). Print media in the advertising markets of the future. Journal Of Media Economics,6(1), 52-72. https://dx.doi.org/10.1080/08997769309358234
Scott, M. (2004). Center for Problem-Oriented Policing | Response Guides | The Benefits and Consequences of Police Crackdowns. Popcenter.org. Retrieved September 2016, from https://www.popcenter.org/Responses/police_crackdowns/print/
Speck, P. & Elliott, M. (2016). Predictors of Advertising Avoidance in Print and Broadcast Media.Journal Of Advertising, 26(3), 61-76. https://dx.doi.org/10.1080/00913367.1997.10673529
Wood, E. (2004). Displacement of Canada’s largest public illicit drug market in response to a police crackdown. Canadian Medical Association Journal, 170(10), 1551-1556. https://dx.doi.org/10.1503/cmaj.1031928
Yu, X., Qi, Z., & Zhao, Y. (2013). Support Vector Regression for Newspaper/Magazine Sales Forecasting. Procedia Computer Science, 17, 1055-1062. https://dx.doi.org/10.1016/j.procs.2013.05.134
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