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Macroeconomic Impact On Business Operations Essay

2539 words - 11 pages

Macroeconomics explores trends in the national economy as a whole considering the study of the sum of individual economic factors. Industry is affected by factors such as GDP, unemployment, inflation, interest rates, and consumer price index. Fiscal (government) policy can help guide the economy toward a particular track without dictating a specific ending affecting tax, interest rates, and government spending (McConnell and Brue, 2005). Monetary policy attempts to achieve vast economic goals by regulating the supply of money through influencing outcomes like economic growth, inflation, and unemployment. Both policies attempt to control or regulate the economy. "If monetary policy is doing ...view middle of the document...

This contributes to increasing healthcare costs which affect the consumer price index measure of a change in the cost of basic goods or services. Consumers become more astute as competition increases thus maintaining profitability in economic downturns could become challenging.Once drug patents expire, other companies can produce generic versions less expensively since there is little research and development and risks are decreased since the benefits and side effects are already known. In order to maintain profitability, the pharmaceutical industry justifies brand name drugs rising faster than the rate of inflation due to the upgrades and value of research and development (EIU, 2006). Companies such as Pfizer have devoted millions of dollars towards direct-to-consumer advertising (Pfizer, 2006). Pharmaceutical companies believe that advertising helps to educate the consumer about disease symptoms and promotes conversation with their family doctor thus leading to early diagnosis. A Harvard School of Public Health study showed that 25% of patients who visited their doctors as a result of direct-to-consumer advertising were diagnosed with a new condition (Pfizer , 2006).United Health Group has developed more affordable prescription programs for senior citizens who often live on a fixed income. United Health Group boasts "the nation's largest and most popular pharmacy discount card program...serving nearly 2 million people" (United Health Group, 2006). In addition to lowering the cost of certain prescriptions, mail services and wellness products are offered. Aging baby boomers worldwide will continue to fuel growth due to older patients being prescribed more medicines.By working together to achieve the same goal of developing promising new drugs to treat disease, Johnson & Johnson and their operating companies help to share costs and intellectual properties towards increasing profitability. Johnson & Johnson has a dedicated focus to biotechnology (the industrial use of living organisms to produce drugs and other products.) The pharmaceutical groups are committed to uniting with others, developing long-term relationships that leverage each company's strengths and bringing advances to patients and physicians worldwide. (Johnson & Johnson, 2006) Some limitations of these best practices include: overwhelming consumers with too much advertising leading to decreased attention, consumer fraud in discount card programs, and the risk of failure in biotechnology efforts leading to a loss of funding. Evaluating other industries' best practices can lead to in-house successes.The ice cream, automobile, and steel industries are worthy of review for best practices since "organizations worldwide are growing more similar" (Varner/Beamer 2004) In 2005 the US ice cream market was valued at 9.2 billion dollars. Projections and forecasting are several of the best practice tools used by the ice cream companies to look at future sales. Nestle SA (Nestle)...

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