Main Issue and Its Implications in Terms of Global Marketing - Assignment Example

Main Issue and its Implications in Terms of Global Marketing Article One Robust carbon trading system can be ours By Chris Bowen/ The Australian Financial Review, November 09, 2009, www.afr.com Summarize As the debate about Australia’s policy response to climatic change rages, the arguments on both sides of the question are well known. There is need fro Australia to adopt the Carbon Pollution Reduction Scheme (CPRS) so as it can be seen to be contributing to the global efforts of finding a solution to the climate change.1 Issue If Australia agrees to adopt the CPRS there will be creation of a new and significant type of financial instrument to be termed as ‘an Australian emissions unit’. Australia can take advantage of carbon trading since it is an area it is highly experienced in and compete in the global market with other regions such as Europe that trade in the market as well. Implications The major significant of the Australian emission units is that it will become a globally tradable instrument. The prospect of this is that in 2013, this financial instrument ‘Australian emissions unit’ will be worth $US669 billion trading in the global carbon market. In addition, there will be creation of job opportunities in the global market. Moreover, the financial sector will have a critical role in this by establishing carbon risk management services that will enable businesses to secure forward prices, finance market transactions and insure against adverse conditions. Consequently, businesses will be able to make rational investments decisions.2 Adopting the CPRS will ensure that Australia gains competitive advantage in the global carbon market at in front of other nations that will enter the market later. Consequently, what Australia need to do is to develop a well- informed and efficient carbon market in order to minimize emissions cost effectively and create an economy which is less carbon-intensive. Article Two New Year to bring cheap cheer to drinkers By Adele Ferguson/ The Sydney Morning Herald, December 23, 2010, www.smh.com.au/ Summarize There is a consideration of splitting the Foster’s Group which will follow creation of a new management office (new board and chief executives). This will have an effect on the Australian $20 billion-plus alcohol industry as well as need to address parallel importing from international market comprising of Brazil, Malaysia and United States. Issue The split and creation of new office in Foster’s Group “is more about pepping up the rock-bottom staff morale rather than accelerating the demerger”.3 Moreover, Foster’s Group might end up as a single listed company or sold out to the highest bidder. Implications If Foster’s Group splits and creates a new office, its boss will not have a position in either of the proposed businesses and will increase the morale of employees and provide a clear cut as to who will be the leaders of the two entities and how the directors will be divided. Although there are two excellent choices for the positions of chief executives, Paul Clinton who will be a director on the beer company is the only one who has experience of the alcohol industry. While this has a positive impact on the beer business it might hit the wine industry since Paul has substantial knowledge of market in North America where much of the business operates. The fact that Foster’s Group might be sold off to the highest bidder might not be work along with a backdrop of unprecedented levels of parallel importing in the alcoholic beverages and the Australian dollar which has seen a number of wine companies dump stock into the market after suffering cancellations when big exports orders are made.4 Another implication is that investors are also worried about the capability of the Europeans economy to resolve the debt crisis. Article Three Morgan Stanley puts world on recession watch By Reuters/ The Age, August 19, 2011, http://www.theage.com.au/ Summarize The United States and the Euro Zone economies are feared to be ‘dangerously close to recession” Morgan Stanley claims. Morgan continues to put blame on the policymakers and the rate policy of the European Central Bank. The global GDP forecast cut to 3.9 per cent growth from 4.2 per cent for 2011 and 3.8 per cent from 4.5 per cent for 2012.5 Issue The Deutsche Bank cut its Gross Domestic Product forecast for China which is considered a major engine for the world economy. There have been many errors with the policies of the developed economies. Economies of the developed countries are experiencing a decline in their growth; such as that the developed market economies averages 1.5 per cent this year which is a decline compared to the last year which was 1.9 per cent.6 Implications The recent policy errors, such as European’s slow and inadequate response to the sovereign crisis and other issues surrounding this that lift the US debt ceiling, have weighed down on financial markets and eroded the confidence of domestic and international consumers and businesses. The unexpected rise of inflation in China put pressure on the central bank to keep prices in check with more interest rate rises even as growth showed signs of cooling. Moreover, recessions and decline in the growth rate of economies lead to high unemployment and political battles such as those currently in the US.7 The overall implication of the United States and Euro Zone economies resulting to a recession is the negative effect it will have on China since it might not be in a position to support the economy of the world. Article Four The repatriate generation By Vivienne Walt, Time Magazine 15 August, 2011, http://www.time.com/time/ Summarize Although Chad is an oil-rich African nation it suffers from rampant corruption, dirty water, unworthy roads and scarce electricity and hence considered the second in the world as the most dysfunctional country. Majority of the families in Africa are supported by their relatives working in the US or in European.8 Issue With the prospects of growth and in economic and gains of political stability in Africa compared to economies of the West, some of the Africans relatives have seen it better to work back at home, hence ‘the Repatriate Generation’. This generation is borne out of the first global economic crisis in 2008 and rocketing value of commodities. Implications The rocketing value of commodities has drawn new investment in Africa and therefore uplifting its growth. Nevertheless, deregulation in several countries which led to the establishment of new industries to private investment and negotiations to end violent conflicts in some of the African countries such as Liberia and Rwanda contributed highly to the creation of new investment opportunities. Between 200o-2008 Africa recorded an annual average growth rate of 4.9 per cent which was higher compared to the 1980s and 1990s.9 Other African nations experiencing an increase in economy’s growth rate include: Nigeria and Ghana. Another implication of growth in Africa’s economy is improved livelihood or the living conditions of the Africans. Due to this and if this continues, consumer spending in Africa could reach $1.4 trillion by 2020 as more valuable commodities enter into the market in Africa. Further, Africa will play an increasingly important role in the global economy. Article Five Asian Stock Markets jump on Fed’s low rates pledge By Pamela Sampson, Time Magazine, 9 August, 2011, http://www.time.com/time/ Summarize The Asian stock market rose to address the consideration of the Federal Reserve to continue keeping the interest rates very low. This is evidence with the rise in the price of oil; where a barrel is costing more than $81. Issue The issue here is that the dollar will slid against the yen and the euro which are considered the world’s major currencies. The Federal Reserve might even consider zero-rating its interest rates which will have a positive impact on the global market.10 Implications If Federal Reserve lowers the interest rates this means that markets might be capable of restoring some stability within them. The Federal Reserve consideration to cut the interest rate comes at a time when US is experience a slow economy growth rate than ever before at a point when it might experience a recession sooner. Following this, the US Federal Reserve (Central Bank) will have to establish and discuss a range of policy tools to address this issue. Due to this, economies across the globe are also struggling with major countries becoming unable to repay their debts. Moreover, there will be an increase in the inflation rate in less developed countries such as China which has been the world’s main economic engine in recovering from past global financial crisis. European banks are also pressured to finance more for the short-term loans thus contributing highly on the debt crisis.11 Basically, the cut in the interest rates will help in the recovery of other world’s major economies hence creating job opportunities with new and expanded investment opportunities for the private organizations and individuals. References Adele F, Robust Carbon Trading System Can Be Ours, The Sydney Morning Herald, December 23, 2010, Available at www.smh.com.au/ Chris B, New Year to Bring Cheap Cheer to Drinkers, The Australian Financial Review, November 09, 2009, Available at www.afr.com Christopher, SR & Derek, K, Economists See Growing Risk of Global Recession, Time Magazine, Available at http://www.time.com/time/ Eric, J, World on Edge of Crisis, ANZ says, Available at http://www.theage.com.au/ Pamela, S, Asian Stock Markets jump on Fed’s low rates pledge, Time Magazine, 9 August, 2011, http://www.time.com/time/ Reuters, The Age, Morgan Stanley Puts World on Recession Watch, 19 August, 2011, Available at http://www.theage.com.au/ Vivienne, W, The Repatriate Generation, Time Magazine, 15 August, 2011, Available at http://www.time.com/time/ http://www.asx.net.au/documents/products/afr_robust_carbon_trading_system_can_be_ours.pdf http://www.time.com/time/magazine/article/0,9171,2086837,00.html http://www.theage.com.au/business/world-business/morgan-stanley-puts-world-on-recession-watch-20110819-1j0s9.html http://www.smh.com.au/business/new-year-to-bring-cheap-cheer-to-drinkers-20101222 195ms.html Read More