Difference Between Common Market and Custom Union

Difference Between Common Market and Custom Union George Walles How does a common market differ from a custom union with respect to the dynamic effects of European economic integration? What may impede the transition from a customs union to a common market? This essay will be looking to identify how a common market differs from a custom union in respect to dynamic effects of European economic integration. After that, the essay will be looking at the sort of factors, which may impede the transition from a custom union to a common market. A custom union is where all obstacles of free movement of goods and services are removed and a common external tariff is agreed. A common market is union of partners with free movement of goods, services, and the addition of free movement of labour and capital. The Treaty of Rome in 1957 set out the intension of a legal basis for the start of the EEC and to establish a Common market (Nello 2012). Custom union theory mainly looks at the static effects of European economic integration; this can be shown through the welfare effect diagram (figure 1). In the home country, based on their domestic supply and demand the price would be at Ph. World trade prices would be at P3 where world supply plus a tariff is equal. At P3 the domestic economy would Produce Q2 and import up to Q3. However once a custom union is established the price will fall to P2 as this is the price at which the union partners sell at. Yet they are still not as productive as the world supply because if you exclude the tariff they would produce the good more efficiently at a price of P1. At the price P2, the home country now produces only Q1 and imports up to Q4. However, the home country gains from being in the custom union, areas X and Y are gains and are trade creation of which are larger than the losses from trade, which is area Z, which is trade diversion. Area X is the gains to the consumer due to the lower prices, while area Y is the gains to the producer because of greater efficiency. However the gains from a custom union are only predicted to be with just 0.15 percent increase in growth. The problem with this analysis is that it only shows the static effects of a custom union, and it is only looking at an individual industry and not the economy as a whole. There are a number of dynamic effects made by a custom union is respect of European economic integration. However, these dynamic effects are explicit to that of a firm or an industry and are similar or the same effects of which a common market has, due to both custom union and common market having free movement of goods and services. These effects are a reduction in Monopoly power and increased competition, reduction in the levels of x-inefficiency and the reaping benefits of economies of scale. The difference between custom union and common market is the free movement of capital and labour, this essay is going to concentrate on the free movement of capital. The free movement of capital is where capital controls and restrictions on the amount of currency that may be imported or exported are abolished (Deutsche Bank 2013). Figure 2 is going to illustrate a situation where there is no capital mobility to free capital mobility in a common market to look at its welfare effects. The native capital owners in Home lose since their reward has fallen from r0 to r. The amount they lose is measured by the rectangle A. The Home labour increases its income by area A plus triangle B, thus the total impact on Home citizens is positive at equal to area D. The Home country also gains from the extra capital flows as it raises total output by area B+C+D+E, while payment to the new capital is only equal to C+D+E, which is r times the capital flows. Moreover, Foreign output drops by D+E, while capital remaining in foreign sees its rewards rise from r*0 to r. The size of this gain is shown in the rectangle F, which is the change in r times the amount of capital left in the foreign country after integration. The total gains to foreign capital is area C+D+E, while the loss to foreign labour is area D+F. The Foreign country therefore gains from the capital outflow by an area equal to triangle C (Baldwin Wyplosz 2009:557). Thus to conclude from this diagram, Capital flows create winners and losers in both nations but collectively they both gain from free movement of capital. The main reason why is due to greater efficiency. For example, foreign capital was producing at r*0 which is inefficient but once there is free movement of capital it then produces at r0 in the Home country. Therefore, capital flows improve the overall efficiency of the EU economy of which the gains and losses are split between the member countries (Baldwin and Wyplosz 2009:558). Furthermore, free movement of capital makes it more profitable to invest into other members economies, this is backed up by the fact that the EU is the largest source and destination of FDI (Foreign Direct Investment) in the world (European commission 2014). The main reason for greater investment this is due to heightened efficiency in the EU zone as the same amount of capital and labour can produce more output, as was explained in the figure 2. Free movement of capital has positive dynamic effects, due to an increase in investment. The best way to show an increase in investment due to European economic integration is through the Solow growth mode. For example When Spain join the EU along with Portugal in 1986 they both had an increase in FDI, for example Portugal FDI was $274,036,105 in 1985 and by 1987 this almost doubled to $465,868,833 and in Spain FDI was $1,967,804,468 in 1985 and by 1987 it had increased dramatically to $4,570,700,793 (World Bank 2014). This increased investment because of the theory of the multiplier effect should lead to an increase in growth, which both Portugal and Spain experienced after EU entry. For example in 1985 Portugals growth was 2.8% by 1987 it had increased to 6.4% similarly Spain in 1985 growth was 2.3% and by 1987 it had increased up to 5.5% (World Bank 2014). Furthermore, Albu (2013) found that the EU, is characterized by complete liberalization of capital movement, foreign trade and economic growth in general were directly influenced by foreign direct investment increasing, this can be shown the diagram below. (Baldwin Wyplosz 2009) If European integration raises investment from S to S2, the inflow of the curve S(GDP/L) will rotate upwards as shown in figure 3 to S2(GDP/L). This change would alter the equilibrium K/L (capital/labour ratio) and at point C. This can be seen also by the movement form K/L to K/L (2). Furthermore, the rising K/L ratio would raise the output per worker from Y/L to Y/L (2). The difference between point B and D show the medium run growth bonus from joining the EU (Baldwin Wyplosz 2009: 224). This can be backed up by economist Richard Baldwin who predicted an increase in GDP within 3.1 percent to 8.1 percent in the UK and even higher in other EU economies once the single market was completed (Baldwin 1989: 265). The second part of this essay will be looking at what may impede the transition from custom union to a common market. It can be argued that the European union was a custom union right up to the late 1980’s because of the impediments of free movement of labour and capital, which some are going to be looked at now. According to Pelkmans (2001: 184) the financial capital market has been completely liberalised since the late 1980s. On the other hand, Molle (2006: 123) found a number of different forms of impediments to free movement of capital. For example the lack of tax harmonization, as differences in tax levels may distort the market as they induce investors to locate in countries which offer the highest tax adjusted profit rates. The European Commission (1996: 42) found that insufficient liquidity of local markets, exchange rate risks, the tax treatment of non-residents, local prudential and incorporation requirements, and national differences in company law were reported as still inhibiting or distorting capital movements. A example of difficulty with free movement of capital is regarding to the banking system in the 1988, where the main obstacles to establishing banks in other member states was a mixture of authorization procedures, capital endowment requirements and restrictions on foreign acquisition. This restriction is proved, as only 1 percent of member states banks were foreign in 1988 (Nello 2012). However, the Maastricht Treaty outlined that all restrictions on the movement of capital between member states and between member and third countries shall be prohibited (Molle 2006: 140). Another issue which impedes the transition of a custom union to a common market is the free movement of labour. There are both cultural and social reasons and economic, the cultural are issues such as having to learn a new language and a new way of life and having to get used to new surroundings, while having to move away from family and friends is also an issue for people because of tight relationships. The social problems exist due to the labour market being heavily regulated, and with member states having different laws on minimum wage, hiring and firing , flexible labour contracts and qualifications (Pelkman 2001:168). This diversity between members acts as a deterrent for people to migrate. Another form of impediment to a common market is diversity is the lack of mutual recognition of qualification completed by people at university or course of training has not kept up to pace with another members standard (The Social and Economic Council in the Netherlands 2001). There showing how a lack of common recognition of standards and qualifications can hinder labour mobility. As free movement is crucial to common market as the EU created the Schengen group in 1985, the main aim was to eliminate border controls. The original members of the Schengen group were Germany and France with all the members later joining (Nello 2012). However, Ireland and England opted out and Demark partially opted out, therefore there is not complete free movement of labour. Furthermore, there are also restriction imposed by the EU itself, for example, migration in the EU is in principle free. Yet when the EU was expanded in 2004, special provisions were temporally imposed on the ten new members to limit migration from these countries to the EU15, with similar policies imposed on Romania and Bulgaria in 2007 (Baldwin Wyplosz 2009: 250). Thus showing more examples of what can and has impeded the transition from a custom union to a common market. In addition to accept, a job a person must have accommodation, while a residence permit for foreigners can be refused or made hard to ge t (Molle 2009). In conclusion this essay looks at identifying the main differences in respect of the dynamic effects of European economic integration of a common market and custom union, of which were found to be greater efficiency, and greater investment between member states as shown with the Spain and Portugal example. Furthermore, by using the Solow growth model demonstrated how these changes have led to higher economic growth within the EU. The Essay also demonstrates how custom union theory only explains the static effects of European economic integration and microeconomic effects within an industry and firms. The essay also outlines a number of potential impediments that moving from a custom union to a common market can have on both the labour and capital mobility, but also gave empirical examples of these impediments taking place in the contemporary European Union. References Albu, L (2013) Foreign trade and FDI as main factors of growth in the EU. Romanian Journal of Economic Forecasting, 16 (2), PP. 7-17 Baldwin, R. (1989) The Growth Effect of 1992. Economic policy, 4 (2), pp. 247-281 Baldwin, R,. Wyplosz, C,. (2012) The Economics of European Integration. 4th Ed. Maidenhead: McGraw-Hill Deutsche Bank (2013) The Single European Market 20 years on. Frankfurt: DB Research European Commission (1996) Economic evaluation of the internal market.no. 4. Brussels: Commission of the European Communities European Commission (2014) Investment [online] available from http://ec.europa.eu/trade/policy/accessing-markets/investment/> [25 October 2014] McDonald, F,. Dearden, S. (2005) European Economic Integration. 4th Ed. Harlow: Prentice Hall Molle,W. (2009) The Economics of European Integration, Theory, Practice, Policy. 5th Ed. Aldershot: Ashgate Nello, S. (2012) The European Union Economic, Policies History. 3rd Ed. Maidenhead: McGraw-Hill Pelkman, J. (2001) European Integration Methods and Economic Analysis. 2nd Ed. Harlow: Prentice Hall The Social and Economic Council in the Netherlands (2001) Labour mobility in the European Union. Bezuidenhoutseweg: Social and Economic Council World Bank (2014) Foreign direct investment, net inflow (BoP current US$) [online] available from http://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?page=5> [25 October 2014} World Bank (2014) GDP Growth (annual %) [online] available from http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?page=5> [02 October 2014]

My Mother

This essay is about how a perfect mother looks like to me. People say that the perfect mother does not exist, I actually don’t know if that is true, but what I do know is that my mother is perfect for me. Everything in my mother is special; the way she dresses, the way she speaks, the way she behaves etc. Somehow they are a part of you, a part of your world, your heart. For me that is my mother. Her voice calms me down. When he leaves for business trips, I feel like a part of me is missing. When he calls me to say hello, he makes everything better in a second. Just the sound of her voice is what I need from time to time. She is very good with words and almost knows what you want to hear when you are sad. The picture of my mother will ever fade away from my mind. Her curly brown hair with white strands throughout make her look younger than she is. She stands at 5’5 and weighs 145Ibs. She has smoky gray eyes that glow when the sun comes up. Her eyes sparkle and change colors depending on her mood. Her eyes and her smile light up my world. Her style of clothing is a little different from other mothers, but I love that about her. She doesn’t let anyone change her mind. She never wears heels because she hates getting dressed up but her favorite shoes of all time are Nike shocks. Being a writer explains her love for book and literature in general. She loves telling stories especially about her childhood and past experiences which she is really good at. She puts her heart and soul into whatever she writes. She has a hard time showing her feelings because of past experiences, but when she writes stories she shows it. It’s her way to express herself. Writing is her way of making her feel better and a way to express herself as a person. Her voice is being heard on paper. My mother is a fantastic cook. You will always find her in the kitchen making some sort of desert. I always used to help her make monkey bread as a little girl. She would always smell like honey and maple syrup. When I was a little girl, I would always remember when she used to tuck me into bed and kiss me goodbye I could always smell maple syrup on her. I love that smell. Even twenty five years later, the smell has never disappeared. She has the same smell that lingers off of her that brings back so many great memories for me. My mother is the kind of person that does not show her feelings a lot. She keeps her feelings to herself sometimes but when she gets the chance to show us, it’s the greatest feeling in the world. She may not kiss or hug us all the time but I always know that she loves us unconditionally. When she does hug us, I feel warm and loved. She doesn’t judge what we have done in the past or what we might do; she teaches us lessons that will help us make the right choices in life. She is the one who is always there for me. If I am having a bad day or just need someone to talk too, she is the first person I run too. She isn’t just my mom but she is my best friend. She knows me instead and out. I get most of my looks from my mom which isn’t so bad because my mom is beautiful inside and out. I am so lucky that my son has her for a grandma because he will have a great role model to look up to when he gets older. They say you will never forget the person you first laid eyes on. Without them you feel lost and not yourself. Somehow they are a part of you, a part of your world, your heart. My Mother This essay is about how a perfect mother looks like to me. People say that the perfect mother does not exist, I actually don’t know if that is true, but what I do know is that my mother is perfect for me. Everything in my mother is special; the way she dresses, the way she speaks, the way she behaves etc. Somehow they are a part of you, a part of your world, your heart. For me that is my mother. Her voice calms me down. When he leaves for business trips, I feel like a part of me is missing. When he calls me to say hello, he makes everything better in a second. Just the sound of her voice is what I need from time to time. She is very good with words and almost knows what you want to hear when you are sad. The picture of my mother will ever fade away from my mind. Her curly brown hair with white strands throughout make her look younger than she is. She stands at 5’5 and weighs 145Ibs. She has smoky gray eyes that glow when the sun comes up. Her eyes sparkle and change colors depending on her mood. Her eyes and her smile light up my world. Her style of clothing is a little different from other mothers, but I love that about her. She doesn’t let anyone change her mind. She never wears heels because she hates getting dressed up but her favorite shoes of all time are Nike shocks. Being a writer explains her love for book and literature in general. She loves telling stories especially about her childhood and past experiences which she is really good at. She puts her heart and soul into whatever she writes. She has a hard time showing her feelings because of past experiences, but when she writes stories she shows it. It’s her way to express herself. Writing is her way of making her feel better and a way to express herself as a person. Her voice is being heard on paper. My mother is a fantastic cook. You will always find her in the kitchen making some sort of desert. I always used to help her make monkey bread as a little girl. She would always smell like honey and maple syrup. When I was a little girl, I would always remember when she used to tuck me into bed and kiss me goodbye I could always smell maple syrup on her. I love that smell. Even twenty five years later, the smell has never disappeared. She has the same smell that lingers off of her that brings back so many great memories for me. My mother is the kind of person that does not show her feelings a lot. She keeps her feelings to herself sometimes but when she gets the chance to show us, it’s the greatest feeling in the world. She may not kiss or hug us all the time but I always know that she loves us unconditionally. When she does hug us, I feel warm and loved. She doesn’t judge what we have done in the past or what we might do; she teaches us lessons that will help us make the right choices in life. She is the one who is always there for me. If I am having a bad day or just need someone to talk too, she is the first person I run too. She isn’t just my mom but she is my best friend. She knows me instead and out. I get most of my looks from my mom which isn’t so bad because my mom is beautiful inside and out. I am so lucky that my son has her for a grandma because he will have a great role model to look up to when he gets older. They say you will never forget the person you first laid eyes on. Without them you feel lost and not yourself. Somehow they are a part of you, a part of your world, your heart. My Mother This essay is about how a perfect mother looks like to me. People say that the perfect mother does not exist, I actually don’t know if that is true, but what I do know is that my mother is perfect for me. Everything in my mother is special; the way she dresses, the way she speaks, the way she behaves etc. Somehow they are a part of you, a part of your world, your heart. For me that is my mother. Her voice calms me down. When he leaves for business trips, I feel like a part of me is missing. When he calls me to say hello, he makes everything better in a second. Just the sound of her voice is what I need from time to time. She is very good with words and almost knows what you want to hear when you are sad. The picture of my mother will ever fade away from my mind. Her curly brown hair with white strands throughout make her look younger than she is. She stands at 5’5 and weighs 145Ibs. She has smoky gray eyes that glow when the sun comes up. Her eyes sparkle and change colors depending on her mood. Her eyes and her smile light up my world. Her style of clothing is a little different from other mothers, but I love that about her. She doesn’t let anyone change her mind. She never wears heels because she hates getting dressed up but her favorite shoes of all time are Nike shocks. Being a writer explains her love for book and literature in general. She loves telling stories especially about her childhood and past experiences which she is really good at. She puts her heart and soul into whatever she writes. She has a hard time showing her feelings because of past experiences, but when she writes stories she shows it. It’s her way to express herself. Writing is her way of making her feel better and a way to express herself as a person. Her voice is being heard on paper. My mother is a fantastic cook. You will always find her in the kitchen making some sort of desert. I always used to help her make monkey bread as a little girl. She would always smell like honey and maple syrup. When I was a little girl, I would always remember when she used to tuck me into bed and kiss me goodbye I could always smell maple syrup on her. I love that smell. Even twenty five years later, the smell has never disappeared. She has the same smell that lingers off of her that brings back so many great memories for me. My mother is the kind of person that does not show her feelings a lot. She keeps her feelings to herself sometimes but when she gets the chance to show us, it’s the greatest feeling in the world. She may not kiss or hug us all the time but I always know that she loves us unconditionally. When she does hug us, I feel warm and loved. She doesn’t judge what we have done in the past or what we might do; she teaches us lessons that will help us make the right choices in life. She is the one who is always there for me. If I am having a bad day or just need someone to talk too, she is the first person I run too. She isn’t just my mom but she is my best friend. She knows me instead and out. I get most of my looks from my mom which isn’t so bad because my mom is beautiful inside and out. I am so lucky that my son has her for a grandma because he will have a great role model to look up to when he gets older. They say you will never forget the person you first laid eyes on. Without them you feel lost and not yourself. Somehow they are a part of you, a part of your world, your heart.

Skills Assessment Summary and Matrix Essay - 818 Words

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Romance de La Pena Negra Essay - 2614 Words

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Techniques For Alleviating Dental Anxiety, Fear, And Phobias

This white paper focuses on techniques for alleviating dental anxiety, fear, and phobias through the use of positive interior support design and environmental distractions. Reports of Dental Anxiety in up to 74% of children and adolescents imply that anxiety is a major concern in dental offices. Pediatric dental theming vastly improved patient experience by relieving anxiety, fear, and phobias from a young age. It is also possible to have a significant positive impact on the duration of a patient’s life, as well as future generations by halting the cycle of dental avoidance through office theming. This white paper also highlights several support design products and delves into the reasons why theming in medical environments is so crucial to patient wellbeing. Anxiety, by definition, is a ‘state of apprehension resulting from the anticipation of a threatening event or situation’ (American Heritage Science Dictionary). Anxiety is differentiated from fear, as fear occurs in the presence of an observed threat, while Anxiety requires no such tangible manifestation. Anxiety may develop into a phobia; which is defined as an extreme or irrational fear or aversion, which may result in avoidance or endurance that results in significant discomfort to the individual. Dental fear, anxiety and phobias negatively effect patient care and develop from an early age. A cross-sectional study of 100 patients from the Pediatric Dentistry Clinic of the Federal University of Parana foundShow MoreRelatedDeveloping Management Skills404131 Words   |  1617 PagesThrough Work Redesign 130 Eliminating Anticipatory Stressors Through Prioritizing, Goal Setting, and Small Wins 132 Developing Resiliency 134 Physiological Resiliency 136 Psychological Resiliency 139 Social Resiliency 143 Temporary Stress-Reduction Techniques 144 SKILL ANALYSIS 147 Cases Involving Stress Management 147 The Turn of the Tide 147 The Case of the Missing Time 150 SKILL PRACTICE 155 Exercises for Long-Term and Short-Run Stress Management The Small-Wins Strategy 155 Life-Balance Analysis 156

Why Did Men Continue to Fight in Ww1 Free Essays

Why did men continue to fight in WWI? The Great War was fought between 1914 until 1918. It took the lives of millions of men and it is said to have had horrible conditions, the question still remains. Why did men continue to fight in the Great War? Was it because of their discipline in the army? Did they fight because of their friends in the army? Or were the conditions in the trenches not as bad as people say they were? This essay will argue that, even though all of these reasons were very important, the main reason men continued to fight was army discipline and comradeship. We will write a custom essay sample on Why Did Men Continue to Fight in Ww1? or any similar topic only for you Order Now Army discipline was definitely an important factor for why men continued to fight. The army aimed to keep soldiers as disciplined as possible, therefore they made severe punishments for misbehaviour. For example, if soldiers refused to walk through â€Å"no mans land† the punishment would be to be shot by a firing squad, the firing squad would be your own battalion. This would be done to increase the discipline of the rest of the battalion. They knew that if they were to disobey orders their friends and comrades would shoot them. However, around five million men served in the British army during the war; out of all these men, 3080 men were sentenced to death but only 364 were actually executed. This evidence suggests that perhaps army discipline was not the most important factor, however, 364 men might have scared most men enough to not disobey orders. The conditions of the trenches were said to be horrific and devastating, however the British army had very high standards of cleanliness and they were aware of what the soldiers needed to keep on fighting. They aimed to keep morale as high as possible and therefore provided more than sufficient amount of food, very good medical care, and tried to generally make the soldiers’ living conditions better. Efforts were made to keep the trenches cleaner; for example, rats were a big issue at the beginning of the war but as the war progressed, they were quickly eliminated from the trenches. Lice were also a problem so they fumigated, washed and ironed soldiers’ uniforms when they came out of the line. Since soldiers got taken care of, this was definitely one of the reasons they continued to fight, or at least made ighting more bearable. The men who fought in the war would often make friends in their battalions. This would definitely keep the men strong and able to fight. The soldiers did not want to let their friends down, and they all wanted to fight for their fellow soldiers. None of them wanted to die, but it was worst to die alone without their friends. They fought to keep th eir friends and themselves alive, so they could bear the war in the company of people they cared for. Sometimes, soldiers became such good friends, they went mad if their friend died, or they would continue to see each other after the war. Comradeship was a very important factor that helped them get through the war. You cannot generalize why men continued to fight. Different men fought for different things. But most men probably fought for various reasons. The fact that the conditions were not so bad probably helped men a lot, as well as being able to fight with their friends. But the fear of death by the hand of their friends was probably what drove most people to keep on fighting in the war. It probably also helped other soldiers encourage their friends to keep on fighting, and therefore army discipline and comradeship are the most important causes. How to cite Why Did Men Continue to Fight in Ww1?, Essay examples

Factors on Resource Competitive Strategies †MyAssignmenthelp.com

Question: Discuss about the Factors on Resource Competitive Strategies. Answer: Introduction: Strategic development is the process in which, managers find long term directions of their organisation, set specific standards for their performance, formulate strategies to attain these objectives and execute the selected action plans with managing all external and internal circumstances. By setting targets, management finds easy to review their accomplishments. By analysing the current market situation, businesses can ultimately avoid the errors other organisations made and reconsider their strategy without any difficulty. Development of business strategies enables the managers to know about the competitive advantages and risks, which is helpful to operate business successfully. Strategic development contributes to the corporate strategy of the company, which directly controls leadership style of the companys management. This essay explains the various tools for effective strategic development within the organisation(Wirtz, et al., 2010). There are various tools for analysing internal and external environmental factors which helps developing strategy of the firm. Some of the main tools includes, PESTEL analysis, Porters Five Forces Model and SWOT analyses. PESTEL analysis: PESTEL analysis is a reliable and majorly used tool for evaluating strategic risk factors. The process of analysing firms external environment includes five stages: finding PEST issues, identifying its effects on the organisation, classifying into threats and opportunities, arranging factors on the basis of priority and taking corrective strategic actions(Song, et al., 2017). Example: Tesco is a multinational company having headquarter in United Kingdom with its stores in 12 countries. Tesco has diversified its operations in mobile, finance, hardware services, insurance and many other sectors. Study of its risk factors through PESTLE analysis will provide more information about the strategy of the firm. Political factors: These contain taxation system, stability of the market and acts of regulations of the country in which it operates. Government of many countries inspire retailers to introduce jobs for the local population because of constant financial stability. For this purpose, Tesco is creating job opportunities and diversifying its functions and products. It is resulting in increase in demand for the products and services of TESCO. Economic factors: Since economic factors are most likely to demand, leverage cost, prices and profits, company should be alert of even small changes in guidelines which may affect the accountability of finance. It is a considerable factor that, while rising internationally, UK market alone holds around 30% of the total market share of TESCO. The major reasons of its success are its two key strategies: Diversification and internationalization. Social factors: A number of social changes shifted the customers towards one stop shopping and bulk purchasing. As an impact of this, TESCO has also enlarged the amount of non-food products. The products and services claimed by the customers are influenced by their social beliefs. Food demands of the customers are continuously changing because they are considering the health issues. Tesco is constantly adopting these changes by providing organic products to consumers. Technological factors: These includes introduction and development of online shopping, facility of home delivery, and introduction of self-service points. Tesco has financed a significant amount in these areas to fulfil long term goals and operate the business functions successfully. Environmental factors: Government of many countries is increasing pressure on the organisations to pay attention towards environmental issues and to implement ways of production that are beneficial for the society. Tesco is committed to dropping its carbon footprint by 50% till 2020. Tesco is also minimizing the amount of waste production in stores by enhancing social awareness in customers. Legal factors: Government legislations and policies directly affect the performance of Tesco. For example: according to the suggestion of Food Retailing Commission, all organisations should introduce a code of practice which may result in banning current practices like changes in price without prior notice or demand for the payment form suppliers. To enable these changes, Tesco offers its consumers price deductions on the fuel purchased by them in accordance with the expenses made by them on grocery stores(Srdjevic, et al., 2012). SWOT analyses: This is a business analysing technique that an organisation can perform for its services, products, and markets while deciding the best possible way to attain growth and success. The process of SWOT analyses involves identifying the weaknesses and strength of the firm, and threats and opportunities exist in the market where it operates(Ayotunde Cheshmehzangi, 2017). Example: This example contains the SWOT analyses of Audi, a well-known international four wheeler manufacturer. Each categories of SWOT includes a list of main facts, which helps in explanation of each category. Strengths: Audi is the second largest car manufacturing corporation in the world function in more than 153 countries. The track record displays high growth in international and domestic sales. Audi has high return on assets and return on equity in comparison to its rivals. Weaknesses: Its market share less in terms of revenue, as compared to other large companies such as BMW, Ford and Daimler. There is an increase in product recall in recent years that shows bad control over product quality. High product recall also results in decreasing consumers faith in brand which may result in decrease in sales(Fujii, 2013). Opportunities: Audi has emphasized on introducing hybrid electric vehicles which may result in increase in demand. Increasing energy expenses and increase in production regulations may become the reason for increase in demand for HEV. Global legislations and environmental factors, and need to consult global resources are chief motivator for consumers in determining acceptability of HEVs(Sarsby, 2016). Threats: Recessions in US, Europe and other main markets have caused in sharp decrease in demand. Audi earns 70% of its total revenue from US and Europe. Car production companies have to bear high amount of fixed labour cost. Manufacturers capacity to reduce fixed cost is generally limited. Sales assistances of leasing functions affects Audis capability to continue its profitability and maintain its share in the market(Grath Bates, 2017). Porters Five Forces Analyses: Michael Porters five forces model measures competitiveness of the industry in which a firm operates. The five forces covers all aspect that are important to analyse the competitive factors that affect the strategic development of the firm Threat of new entrants: Capital requirement for enter into beverage industry is low and barriers to enter into market are almost none. A number of new brands are appearing in the industry with same prices and products. On the other hand, Coca-Cola have substantial market segment from a long time and good customers does not accept a new brand so quickly (Martin, 2014). Threat of Substitutes: There are a number of soft drinks available in the industry having almost same taste and flavour to Coca-Cola. Even sometimes it is not possible to find out the difference between Pepsi and Coca-Cola(Wilkinson, 2013). Bargaining power of buyers: Individual buyer is not able to pressurise profitability of Coca-Cola. But large buyers like Wal-Mart, can affect the business of the company because they make purchases in bulk quantity(D'aveni, et al., 2010). Bargaining power of suppliers: Coca- Cola generally make purchases in large amount from its suppliers and suppliers are also not differentiated or concentrated. It reflects the fact that bargaining power of suppliers is not so high that impacts the strategic development of Coca-Cola. Rivalry: The main rival of Coca-Cola is, Pepsi which also offers a range of soft drinks. Both Pepsi and Coca-Cola are leading beverages and heavily used in outdoor activities and events. There are other many brands with different flavours but none of those brands are able to reach the level of Pepsi and Coke(Tavitiyaman, et al., 2011). In order to introduce strategic development, a company can used any of the above mentioned tools or all of the tools to know about the external and internal environmental factors that affect the strength, weaknesses, threats and opportunities of the firm. The study concludes that after analysing all the factors, their effects and corrective action, it is easy to develop a strategy for effective functioning of the firm and to achieve competitiveness and growth(Nelke, 2011). References Ayotunde, D. Cheshmehzangi, A., 2017. Passive Cooling Energy Systems SWOT Analyses for Energy-use Reductions at Three Spatial Levels. Energy Procedia, Volume 105, pp. 3411-3418. D'aveni, R. A., Dagnino, G. B. Smith, K. G., 2010. The Age Of Temproary Advantage. Strategic Management Journal, 31(13), pp. 1371-1385. Fujii, T., 2013. Global Competitive Advantage Skill of Balanced Scorecard By SWOT Analysis and Strategic Map: BSC Project Management Essentials by Many Case Study of SWOT Analysis?and Strategic Map. Tennessee: Tom Publishing. Grath, J. M. Bates, B., 2017. The Little Book of Big Management Theories: ... and how to use them. 2nd ed. London: Pearson. Martin, 2014. Threat Of New Entrants | Porters Five Forces Model. [Online] Available at: https://www.cleverism.com/threat-of-new-entrants-porters-five-forces-model/ [Accessed 15 April 2018]. Nelke, M., 2011. Strategic Business Development for Information Centres and Libraries. Amsterdam: Elsevier. Sarsby, A., 2016. SWOT Analysis. s.l.:Lulu.com. Song, J., Sun, Y. Jin, L., 2017. PESTEL analysis of the development of the waste-to-energy incineration industry in China. Renewable and Sustainable Energy Reviews, Volume 80, pp. 276-289. Srdjevic, Z., Bajcetic, R. Srdjevic, B., 2012. Identifying the Criteria Set for Multicriteria Decision Making Based on SWOT/PESTLE Analysis: A Case Study of Reconstructing A Water Intake Structure. Water Resource Management, 26(12), pp. 3379-3393. Tavitiyaman, P., Qu, H. Zhang, H. Q., 2011. The impact of industry force factors on resource competitive strategies and hotel performance. International Journal of Hospitality Management, 30(3), pp. 648-657. Wilkinson, J., 2013. Threat of Substitutes (one of Porters Five Forces). [Online] Available at: https://strategiccfo.com/threat-of-substitutes-one-of-porters-five-forces/ [Accessed 15 April 2018]. Wirtz, B. W., Schilke, O. Ullrich, S., 2010. StrategicDevelopment of Business Models: Implications of the Web 2.0 for Creating Value on the Internet. Long Range Planning, 43(2), pp. 272-290.