Economics Report 3 Essay Example | Topics and Well Written Essays - 1750 words

Economics Report 3 - Essay Example The company currently is also observed to be focused on product differentiation to obtain competitive advantages through the demand shift trends reflected in the recent market changes. Table of Contents Abstract 2 Table of Contents 3 1.0. Introduction 4 1.1. Report Brief 4 1.2. Company Background 4 1.3. Research Aim 4 1.4. Method of Data Collection 5 2.0. Literature Review 5 2.1. Demand Theory 5 2.1.1. Demand Curve 5 2.1.2. Price and Demand Elasticity 6 2.2. Market Structure Theory 6 2.2.1. Product Differentiation Theory 7 2.2.2. Sales Revenue Maximization Theory 7 2.3. Long Run Theory 8 3.0. Case Study 8 3.1. Demand Curve Shift 8 3.1.1. Sainsbury Investment 9 3.2. Market Structure 9 3.2.1. Product Differentiation Strategy 10 3.2.2. Product Shift and Sales Maximization 10 3.3. Unconventional Long Run Company 11 4.0. Conclusion and recommendation 11 4.1. Answer to Aim 11 4.2. Overall Conclusion 11 4.3. Recommendations 12 References 13 1.0. Introduction 1.1. Report Brief This report ai ms at examining the current performance deciphered by the UK based retail giant, J. Sainsbury plc (Sainsbury). Accordingly, to accomplish the defined objective, various economic theories have been applied and eventually, make suggestions for the better performance of the company in future. 1.2. Company Background The retailing company was founded in 1869 by John James Sainsbury and his spouse Mary Ann Sainsbury. Since then the company has been growing at a sustainable pace. Currently, the company operates over 1,106 supermarkets and convenient stores and has an employee base of 157,000. Operating in the retailing industry the company has it’s headquarter in London (J Sainsbury plc, 2013). 1.3. Research Aim As mentioned above, this study aims at researching the current developments in Sainsbury’s strategic behaviour along with that observed in its industrial trends, with the application of relevant theories. Based on the inferences drawn from the assessment of Sainsbury ’s current developments, as presented in its annual report for the year 2013, the essay also aims to suggest few rational recommendations to the company. 1.4. Method of Data Collection The primary source used in this research is the 2013 annual report of Sainsbury. Besides this source, information from the company website are also used in this essay, as per as the requirement. Additionally, inferences have been drawn from relevant peer-reviewed journals and academic sources so as to accomplish the research aim. 2.0. Literature Review 2.1. Demand Theory According to the demand theory, explained in Reynolds (2011), customers’ willingness to buy the commodities served by a particular industry or by a company along with their purchasing capacity, determines the market demand. The theory bases its assumptions on the study of various determinant factors that influence consumer willingness and their purchasing power as well. These determinant factors include, the price of the products (Px), price of the other goods or substitute goods (P0), income of the consumer (I), advertisement and the structure of population (N) among others. Thus, the demand function is depicted as D = f (Px, P0, I, N). The theory further assumes that consumer demand for a particular commodity varies if