E-marketing Essay Example | Topics and Well Written Essays - 1750 words

E-marketing - Essay Example Individual companies and organizations have developed websites that are aimed at reaching a considerable number of the target market. These websites have had their flaws and thus, the need to improve or adopt a different website that is of attraction to the user. A number of strategies have been proposed to improve the look and feel of the website such as using different advertising strategies and search engine optimization. Majority of online stores use e-marketing as a tool to advertise and sell their products and services, in this study, the website of Amazon.com will be analyzed, and suggestions offered in regard to the website. Although the company has done much on the website, there are a few things to be added and others improved. For example, the company can consider including mobile phone technology in its payment system. The organization can also take measures to allow users access its services through their smartphones. In addition, the company can engage Search Engine Opt imization in order to ensure that it gets the most traffiick which may end up being transformed to customers. E-marketing: Amazon Introduction Jeff Bozos founded Amazon.com in 1994, and the company has grown quickly to become a successful e-commerce company (business) in the universe. Today, the company is among the Fortune 500 companies and of the biggest online retailers in United States. Unlike, the other companies, such as e-bay which do online auction, the focus of Amazon.com has been on retail sale. Amazon.com has grown in the world in a rapid rate and has become one of the famous retailing website in the universe. The success of Amazon.com is attributed to its consumer friendly website interface and inventive tools that assist the consumers such as offering lists of popular books, the recommendation system, and lists of the best sellers (Wong 2009). Amazon is one of the first businesses to sell products embedded in their long chain through housing them in their many warehouses. It also distributes products from the numerous partner companies. Amazon acts as a medium or directly sells a wide range of products. These p roducts include consumer electronics, videos, music, clothing, household products, and books. Most of products sold are done through Amazon, however, majority of them are from third-party sellers (CrunchBase 2012). In this essay, Amazon.com website will be analyzed in terms of how it markets its products, and how it can improve online sales for its products. Suggestions to improve its online sales of product such as Search Engine Optimization and advertising strategies will be discussed in detail. Website Analysis The success of Amazon is as a direct consequence of the strong user shopping experience. There are several features that make the Amazon shopping experience a model worth to be imitated by e-commerce developers. The shopping experience of Amazon starts on the home page where user or shopper is visually informed of the two-fold purposes of the website; to inform customers of available products and their characteristics and to direct customers toward purchasing the products. Apart from the disorderly layout and several clean distinct components that attract the eye of the user, the shopping/search controls at the top, and the navigation section on the upper left stand out in the Amazon home page. With such components highlighted, the two-fold aim of the Amazon website is achieved when the user is capable of quickly finding and purchasing products, and the seller is capable of quickly processing online purchases and making a profit (Webdesigner depot 2009). The online shopping and product search are very conspicuous even for an individual who has visited the website for the first

Memo about organizational change Assignment Example | Topics and Well Written Essays - 1500 words

Memo about organizational change - Assignment Example Therefore, mangers should have to the ability to manage change in the organization. Change is a strategy for success and enhancing the performance of the organization. This essay proposes a specific organizational change, as well as, the reason for the change in the organization. Blackberry Limited, which was formerly known as Research in Motion Limited, is a company in question that I will propose an organization change (Rothwell & Roland, 24). The company is based in Canada and deals with telecommunication and wireless equipment, as well as, the provider of a secure high and reliable software for Mobile Device Management and industrial application. The company is commonly known for the development of blackberry brand of tablets and smartphones. The company should change their organizational strategy by reducing the workforce that was meant to save the organizations money that they do not have as another phone company’s such as Apple and Samsung have dominated the market. The reason for organizational change in Blackberry limited has been associated with the financial struggle they have gone through that has been; as a result, competition. The value of the proposed change is that it will help the organization in getting back where it was before its competitors entered into the market. This is because there has been an increase in the number of phone companies globally that are making smartphones that have the same features as those found in blackberry. Blackberry decided to lay off their employees as they could not raise enough money to cater for their salaries. However, in a memo released by CEO John Chen he indicated that the company had completed its workforce reductions that have been on for three years. For that reason, the company was willing to hire only if the market did not get worse. The workforce reduction

Scoore Essay Example | Topics and Well Written Essays - 1000 words

Scoore - Essay Example Not only is soccer one of the world's most popular sports, but it is also one of the oldest, with a deep and rich history dating back thousands of years. It is not known where soccer originated from, but there is evidence that a version of the sport was played during the Roman and Greek eras and also during the Han dynasty in China. Despite being played in various forms around the globe, it is the English who are credited with forming the modern version of what we call soccer. In the early 1800s soccer was played at many English universities and schools under what were known as the Cambridge Rules. It was not until 1863 when the Football Association of England was formed and agreed on a set of rules by which to play the game. Through colonization, the British were able to spread the game of soccer to every corner of the earth. In 1904, FIFA was established to control the game on a worldwide level, as by that stage the sport was popular throughout much of Europe and South America. Twe nty-six years later the first FIFA World Cup was held in Uruguay. Since that time there has been a further 18 tournaments have been held, with the next one scheduled for 2014 in Brazil. In recent years the game of soccer has also caught onto a female audience. There are now many female soccer players who play professionally, particularly in the United States and England. Since 1991 there has been six FIFA Women's World Cups, with the next one to be held in Canada in 2015. Wayne Rooney is the soccer player that I most admire because of his skill on the pitch and style that he plays. He now plays for Manchester United in England, and he has played for more than 10 years with his national team. He is the most widely respected player on the England team, and all of his opponents recognize him as the danger man when they play against his team. Rooney first became famous back in 2002 when he was only 16 years old. In a match for his boyhood team Everton, he scored a late winner against a star studded Arsenal team. Since that time Rooney has been treated like a superstar by the media and fans. I must say that I am in awe of his ability to play soccer because he always plays with a determination on his face that I can only admire. However, Rooney is also a controversial player too because some people don't like his fierce personality. I must admit that there are times when he frustrates fans, such as when he tried to engineer a move away from Manchester United. What I do know is that he will very soon become the record goal scorer for both Manchester United and England, and if he achieves those feats then he will go down as one of the best British soccer players ever to have played the game. Although I do like Wayne Rooney as a soccer player, my favorite team would have to be Barcelona. The reason is that they play in a style that is aesthetically pleasing to the eye and it almost seems effortless when they play. Over the past few years they have dominated European so ccer, winning many league titles in Spain and also the Champions League in Europe a couple of times. This is in large part thanks to the genius that is Lionel Messi. He is widely recognized as the best soccer player on the planet, and it is hard to argue against this because he has been the FIFA World Player of the Year four years running. Apart from Messi there are many other great players on the Barcelona team, such as Xavi, Iniesta, and Neymar. The thing that I

Policy Problem Statement Assignment Example | Topics and Well Written Essays - 250 words

Policy Problem Statement - Assignment Example Hansen (2013) asserts that the state allocates funding to older adults acre givers that any other population group. An increase in their population would increase the budgetary allocation of funds to this population group. Walshe & Ham (2011) are also of the assumption that the consumption of health services by older adults may be significantly altered by a major population growth. The author supports the argument by pointing out that, the shortage being experienced in the health workforce may have native effects to the growing population of older adults (McKenzie, Neiger & Thackeray, 2012). The number of increased older adults can be a matched to the decrease in the number of caregivers. The development of these two trends may decrease supply and increase the demand of health services (Perlino, 2006). Considering the forecasted growth by 2050, the government and health stake holders should put in place measures to limit negative effects that may be caused by the growth of the older adult

Satisfying All Stakeholders Is Difficult When the Business Is Competing in Mature Product Markets Essay Example for Free

Satisfying All Stakeholders Is Difficult When the Business Is Competing in Mature Product Markets Essay A stakeholder is defined as an independent party with an interest or concern in something. Stakeholder groups are not all alike and therefore will want different things from a business. As each stakeholder deals with the business in different ways these needs are likely to conflict. With all of these differing needs it will be difficult for the business to satisfy all stakeholders at the same time as it is likely that acting to satisfy one stakeholders needs will end up conflicting with anothers meaning that the second stakeholder will not be satisfied. Examples of stakeholders include the shareholders, employees, suppliers and customers of a business. The Product Life Cycle is a theory used by management to understand where one of its products is in terms of its eventual life expectancy. It involves identifying if the product is in one of four phases: the introduction, growth, mature or decline stage. By identifying which stage of the cycle a product is in management can change its strategies to realise the potential success of a product. It is however, often difficult for management to see where the product is in the cycle as a rise or fall in sales most of the time will not necessarily mean that a product is growing or beginning to decline. It is also very hard, if not impossible, to accurately predict when the product will go into the next part of its life cycle. A business will find it very hard to tell when a market will reach saturation and will only know it while it is happening or in, some cases, after it has happened. While using the product life cycle model it is assumed that all products have a limit to how long they will be used, in practise this may not be the case. The mature stage of the product life cycle is when a product market has finished growing, sales start to slow down and there is no more significant growth. At some point the market will reach saturation at which point the product enters the decline stage. Sales will start to decline slowly and eventually product will become obsolete and not sold anymore. When a product market reaches the mature stage it will usually mean various things. As the mature stage of a product is when there are the most sales it usually means that the costs of producing each product are at the lowest as a result of economies of scale. This means that there is potentially more profit to be made per product if the price stays the same. However, often this is not the case as when a market reaches maturity more competitors emerge. As a result of this a business is likely to decrease the price of its product, eating into the profit margin per product sold, so that customers are more likely to buy its product. By selling more products the business will gain a healthy market share. Market share is what is mostly sought after by a business in a mature market. With little growth to expand into in the market a business must aim to gain the biggest slice of the market as possible to increase profit. The stakeholder that is likely to be one of the most important to a business is the owner or shareholders. They have a say in how the business is run and if they do not feel that the business is doing well will remove their investment and the business will lose finance. Shareholders will want two main things: increase in the size of the business and a good dividend. Therefore it is of great importance that the business keeps the shareholders happy. To do this the business must at the very least turn a profit. This will make the investing shareholder see that their investment is being put to some use. However if the business really wants to make the shareholder feel satisfied it must make a large profit. In a mature market this means that it must have a large share of the market. To do this it must differentiate its product to make its product more attractive to buy than a competitors model. The customer must have an incentive to buy this product over another one such as a lower price or differentiate the product in other ways such as highlighting the products supposed better quality or more impressive features. Differentiating the product can, however, have an effect on the profit taken per sale. Obviously by lowering the price of a product there will be less profit margin as the cost to the business of producing the item will remain the same. Also if the business decides to increase the quality or add extra features the cost of manufacturing the product will increase. While these may eat into the profit margin per product, if the business has marketed correctly and increased market share in the mature market by increasing sales the overall profit of the business may have increased. Management would hope that this would be the case given that this was the whole aim of the product differentiation in the first place. However by actually achieving an increase in the size of the business the shareholder would be satisfied with their investment. Added to this a good dividend could be given out because of the increased profits and the shareholders should be pleased. However another stakeholder that the business will want to satisfy is the customer. As the customer is the way the business will make a profit, by selling to them, it is very important that the business satisfies the needs of the customer and make them want to buy its products. The customer will want a good quality product at a preferably low price at which he feels that he is getting good value for money. In a mature market generally a consumer will get the best value for money with all of the competing businesses producing a large amount of alternative products and vying for market share. As such in a mature market a customer is likely to be most happy. The customer has conflicting needs with the shareholder in that the customer wants a low price whereas the shareholder wants a high profit. As these needs conflict a median must be found where both stakeholders feel that they are getting a good deal. While it may be tempting to favour one group, it is in the interest of the business to find a point where both sides feel happy because if one side feels unhappy the business will either lose the support and investment of the stakeholders or the custom and income from the customer and this will lead to a loss in market share. This is the same as all of the stakeholders. As all of the stakeholders will want different things from the business and some of them will completely contradict each other it must deal with them as best they can and try to find a solution where all stakeholders are satisfied. Keeping all stakeholders satisfied is critical to keeping the business going strongly and losing the faith of one of them could lead to dire consequences and none of the stakeholders being satisfied. For example if, in a bid to cut the cost to the business of producing the product so the shareholders could be given a bigger dividend out of a larger gross profit, the business told the supplier of raw materials that make the product that it must cut its price the supplier would not be happy. This could lead to the supplier refusing to sell the raw materials to the business and this would mean that until an agreement was made or a substitute supplier could be found the business could not produce anything to sell. This would lead to the customer not being able to buy the product that it desires and going to a competitor and the business losing potential profit which would upset the shareholders. In some situations the same groups of stakeholders may not ven have the same sets of ideas of what they want from a business making it even harder for the business to keep everyone satisfied. For example, in the group of shareholders a young businessman who has shares in a company is likely to prefer the profit made to be invested back into the business to expand and increase potential future earnings and increase the share price as opposed to a large dividend as he has less need for the money now and has long term plans for the shares. However an older retired man is more likely to prefer a large dividend to be taken out of the profit so that he can have the money now. In conclusion, it is difficult for a business to satisfy all stakeholders at any time regardless of what stage of its cycle the product is in. The demands of a each stakeholders are different and likely to contradict each other. However, in a mature market where there is fierce competition there is tension between the arguably the business two biggest stakeholder: the shareholders and customers. While the customers want a quality, low priced product, shareholders require a good profit be made. The business must satisfy the customer to compete in the market but also the shareholders to have the backing it needs to carry on functioning. Sometimes even groups of shareholders are fragmented which makes it even harder but it is critical for the business to find a point where all shareholders are content as this is when the business runs the smoothest.

Advertisements Define Females Beauty Standard Media Essay

Advertisements Define Females Beauty Standard Media Essay Advertisements in women magazines has became active when marketer realised the purchase power of women, Marchland, 1985 suggested that in 1920s female purchasing power took over 80 percent of the whole consumer purchases. That was because the gender role of female at that time was home orientated, they were responsible for familial expenditure. As time changes, when the market of home orientated product got saturated, marketing then stereotypes women interconnected with sexuality. Courtney and Lockeretz suggested four general stereotypes of women were presented in print advertisement: A womans place is in the home; women do not make important decisions or do important things; women are dependent and need mens protection; and men regard women primarily as sexual objects (Courtney Whipple, 1983 pp.7). The beginning of media influence on beauty standard The advertising agencies referred women as General Purchasing Agent, as purchasing agents, women could command respect for exhibiting qualities previously honoured primarily in men-capacities for planning, efficiency, and expert decision making (Marchand 1958 pp.168). The G.P.A has became a corner stone of advertising in the field of female market, during this period advertising often adopt the theme of successful woman gain social acceptance and social approval through employing or consuming a particular product. McEwen suggested in 1976 that, from the field of social psychology, advertising agencies have employed the belief of the social self as a principle technique in advertisements by defining what was socially approved and what was not. During the phrase of social acceptance, the media portrayed the role of women as being responsible for broadening their social and intellectual interests as well as maintain youthful in order to be a modern companion for their husbands. They needed to preserve their youth so that they could beautify their husbands lives and keep pace with them during evenings of dancing and the theatre (Marchand 1985 pp.175).The importance of being self conscious of body image and appearance has been introduced through media, especially with the reinforcement of advertising in the late 1920s. In the middle of her mechanically engineered kitchen, the modern housewife was expected to be overcome with issue of whether her self, her body, her personality were viable in the so cio sexual market that define her job. Advertisements used pictures of veiled nudes and women in auto-erotic stances to encourage self comparison and to remind women of the primacy of their sexuality (McEwen 1976 pp.179). The idealised female images in which portrayed in media has always been changing, so is the standard of beauty perceived within the society. The media provides idealised body images of women by providing role models or examples of attractive women, for example, catwalk models and actresses. In which, audiences could compare themselves with the idealised body shape or appearance. The idealised body shaped has changed from being voluptuous and curvaceous in the 1940s and 1950s to being busty and narrow-hipped from the late 1960s through the 1980s (Straight 2005 pp.2) The reason of which the idealised beauty standard has always been changing was because companies need to create an unsustainable beauty standard to ensure targeted consumer will keep purchasing different goods to maintain satisfied with their appearance. Freedman, 1986 mentioned the beauty ideal was impossible to achieve and this could lead to feelings of inadequacy. The feelings of inadequacy were often fed by cosmetic and diet product manufactures, in which the primary objective of their advertisement campaigns were to persuade women they could improve their imperfections only by consuming their products. However the effects of media have on audience can vary due to individual differences. Audience with different personalities, pass experiences and social context interpret the messages of the media differently, in addition, different medium also provides different influence for audience, and for example, the influence of advertisement shall be strongest among the mediums, because the principle of advertising is to influence audiences behaviour and value. Ethical issues with advertising influence The internalization of an attractiveness ideal and a perception of body dissatisfaction may serve to mediate the relationship between media exposure and disordered eating (Stice et al, 1994). Media Awareness Network journal reported over three quarters of the covers of womens magazines include at least one message on how to alter and improve womans bodily appearance by cosmetic surgery or diet. The ratio of diet ads in mens and women magazine is 1: 10, in which the ratio of eating disorders in men and women is identical. This indicates a relationship between exposure to diet ads and eating disorders, however gender differences may also affect behaviour. Theories of media influence on beauty standard Social comparison theory A theoretical model using social comparison processes can be offered to explain how exposure to the socio-cultural thin and attractive ideal leads to increased body dissatisfaction (Heinberg and Thompson, 1992; Smolak et al, 1993; Thompson et al, 1991). This theory suggests that individuals make upward comparison with others who offers specific, valued attributes. It also takes individual differences into account, for example, the differences in regard of self-esteem. Mintz and Betz, 1988, conducted a research that shown female college students who felt dissatisfied with their bodies image were more likely to conform to the stereotyped body presented in the media as attractive. This theory suggested that social comparison does not only occurs through comparison with images in the media but also with social group, e.g. friends and families member. The studies of social comparison often reported positive correlation between social comparison and body dissatisfaction. Schema theory Self-schema theory envisages body images as a mental construction rather than an objective evaluation (Markus, 1977). A self schema is an individuals mental perception of the way they are. This mental presentation has established over time mainly through pass experience of what others labelled or referred them in a particular way. For example, I am attractive or I am skinny. These kinds of attributes are taken into account in self concept and self esteem. Schema have been defined as cognitive generalizations about the self, derived from pass experiences, that organize and guide the processing of self-related information contained in the individuals social experience (Markus, 1977 pp.64). According to Markus, 1997, schematics constantly evaluate stimuli that are relevant for their body weight. Media images are one of the stimuli that trigger new schemas. The buyer decision processes According to Nicosia, F. 1966, a consumer decision making process involves five stages traditionally, which are problem recognition, information search, evaluate of alternatives, product choice and outcome. Problem recognition occurs when consumer realises a significant difference between the consumers current state and the ideal state he/she desired. The consumer sees this as a problem and requires a solution to solve, when the problem has been recognised, consumer will need adequate information to resolve the problem, in which the consumer will enter the information stage. There are briefly two kind of information search, the internal search and the external search. Internal search begins when consumer search alternative product from prior experience and his/her existing knowledge on a particular product and its alternatives, external search is when consumer gathers informative from external cues, for example, friends and advertisements. Finally, the consumer will enter the stage o f evaluation of alternatives. The buyer decision model are often used in advertisements, taking the Rimmel Mascara commercial 2007 as an example, the commercial started with Kate Moss ( the famous model) putting on mascara while a male narrator saying the more you put on, the sexier you are. The commercial intend to show differences between the audience current and ideal state of desire by showing the image of Kate Moss with the Rimmel Mascara on. By using a model that majority regard her as attractive, this create an upward comparison with others who offers specific, valued attributes. This could refer to the social comparison theory. The Rimmel Mascara also offered a solution for the problem, the commercial emphasis the more Rimmel mascara the audience put on the sexier they will be. The positive reinforcement shows the cause and effect of the Rimmel mascara and this increase the likelihood of conformity. Industry background Advertising industry The United Kingdom advertising industry was worth over  £16.5 billion in 2001. There are estimated 600 agencies in London and 20 agencies among the 600 agencies are full service agencies. Agencies can be categorized as 5 distinct types of agencies Creative agencies Media agencies Direct marketing agencies Digital/online agencies Full service agencies Role of the agencies Creative agencies work on behalf of clients, develop creative ideas for an advertising campaign. Media agencies consults clients on where, when and how to spending advertising budgets. Direct marketing agencies provide clients direct and strategic communication with the target audience, for example, direct mail. Digital/online agencies profession at digital communication. For example, search engine marketing. Full service agencies combine all the services of creative, media, direct marketing, digital/online agencies. Research questions and objectives Aim To explore the methods and strategies that advertising agencies use to influence womens perception of beauty standard. Research question Which methods and strategies used my advertising agencies are more efficient to stimulate womens conformity to the presented beauty ideal? Objectives To discuss the methods and strategies used by advertising agencies to influence female beauty standard. To compare the difference, between female in the age groups of 12-18 and 21 27, their perception of beauty standard influenced by printed advertisement. To investigate the ethical issue of advertising the idealised beauty. Research methodology Research approaches Deductive approach Deductive approach is employ when a researcher develops a hypothesis that can be tested by a research strategy. Inductive approach Inductive approach is employ when researchers collects information and develops theory as a result of information analysis. Research strategies There are mainly seven research strategies that are being used in business researches. Experiment. Questionnaire. Interview. Case study. Action research. Grounded theory. Ethnography. Archival research. Sampling Statisticians have proved the larger the sample size, the nearer its distribution will be to the normal distribution, statisticians also suggested that a sample size of 30 or more will be more likely to result in a sampling distribution for the mean that is close to normal distribution. Stutely, 2003 suggested a minimum number of 30 for statistical analysis provide valuable rule of thumb for the smallest number in each group of the overall sample. Therefore the sampling size of my primary research will be 30. Strategies for my primary research Experiment Experiment is a classical form of research that owes much to the natural science, although it features strongly in much social science research, particularly psychology. The purpose of an experiment is to study casual links; whether a change in one independent variable produces a change in another dependent variable (Hakim, 2000). The experiment strategy concerns the relationship between two variables, it is often used in explanatory or exploratory research to find out why and how questions. The experiment usually takes place in a strictly controlled situation, for example, laboratory to eliminate threats to internal validity. However, whilst the strictly controlled situation enhances the internal validity, the external validity is often hard to establish, as the controlled situation is often not a real life situation. Strategies for my secondary research Multiple source secondary data Multiple source secondary data will be an amalgam of both documentary and survey secondary data. It will take account of books, journals, articles, newspaper and previous research. The secondary research will be used to cover objectives below. It will be a mixture of qualitative (theoretical) and quantitative (numerical) data. To discuss the methods and strategies used by advertising agencies to influence female beauty standard. To investigate the ethical issue of advertising the idealised beauty. The reason of using a mixture of qualitative and quantitative date is to produce that can be statistically analyse to identify relationship between variables and to have theoretical data to support my research. How the experiment will be conducted The experiment will be carrying out in order to fulfil objective two. (Compare the difference, between female in the age groups of 12-18 and 21 27, their perception of beauty standard influenced by advertisement.) The reasons of choosing the age groups of 12-18 and 21-27 are because of the significant differences in cognitive maturity. Adolescents are also more likely to conform due to the high need of social acceptance. Hypothesis Adolescents are more likely to conform to the ideal beauty presented in the media. The sampling 30 participants in each age group. Participants selected by random sampling in central London. The experiment will be conducted under a controlled situation, for example, a conference room in London. Method The method below will be repeated in both 12-18 and 21-27 age group. Divide each age group participants into experimental group and control group. Both groups will be given a survey questioning how satisfy the participant feel about their appearance. Experimental group will be given 10 printed advertisements with attractive female before they answer the survey. The control group will not be given printed advertisements before they answer the survey. Compare the results of both experimental group and control group. Statistically analysis the result of both age groups. Resources Internet access for secondary data. Library access for secondary data. Experiment will be host in the conference room of my uncles office, in which permission has been gained and cost free. Excel software to analysis primary research. Printer. Financial resources Transport fees for participants involves in primary research. Additional cost for employing participants in primary research if volunteer participants could not be found. Budget 5 pounds transportation fee for each participant. Cost of employing participant will be estimated at 10 pounds each. Total cost = 90pounds.

Impact of Inflation on Chinas Economy

Impact of Inflation on Chinas Economy Chinese inflation is rising too fast But its had another major side effect. The Chinese economy is fast overheating. All that extra liquidity is driving up prices and wages, while property values have soared. In October, the official figures showed Chinas cost of living climbing by 4.4% year-on-year. That was the fastest increase in more than two years. And the situation may be rather worse than this. Two weeks ago a pundit at the Chinese Academy of Social Sciences, one of the governments top think tanks, said that by its own calculations the countrys consumer price index had been understated by more than 7% over the past five years. And last week the original Dr Doom, Marc Faber, said he reckons the real Chinese inflation rate is nearer 10% a year. Whatever the exact figures, theres no doubt inflation is rising far too fast for comfort for the authorities. The Chinese central bank has been trying to cool things down gently. Five times this year its raised bank reserve requirements, which reduces the amount that lenders can lend. Yet the credit brakes are being tapped, not slammed, says the FT. The government could be more aggressive. In other words, so far the tightening hasnt had much of an impact. The workforce is getting far stroppier than it once was. Between 2007 and 2008 the latest available data labour disputes more than doubled. Food prices are already rising at 10% year-on-year. The Xinhua news agency reported last week that a basket of 18 staple vegetables cost 62% more during the first ten days of November than in the same period last year. So higher wage demands are likely to become more frequent as most of the population lives close to the edge, says the FT. In fact, its starting to look like Chinas inflation problem has now got rather out of hand. This article is talking about the inflation occurring in China and the costs that it has brought to China. This inflation has caused severe consequences to China and we will be discussing the possible solutions inflation  is a rise in the general  level of prices  of goods and services in an  economy  over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the  purchasing power  of money a loss of real value in the internal medium of exchange and unit of account in the economy. A chief measure of price inflation is the  inflation rate, the annualized percentage change in a general  price index  (normally the  Consumer Price Index) over time. Costs of inflation in China: When inflation rates are high, groups such as pensioners, households, dependent on social security benefits, stand lose to a great deal since they are often on fixed incomes. These Chinese will now be able to purchase less than before (less purchasing power), and will start to demand for higher wages. Only those with strong bargaining positions will be able to bid up for higher wages. In addition, people will be able to buy less food items than before which is a major issue because food is one of the basic necessities in human life, as in the article it has shown the the prices of food increase 10% year-to-year. Inflation causes an increase in interest rates and will therefore have a negative effect on investment and output, both of which will adversely affect employment, as in the article we can see that labour disputes have been doubled Higher inflation means that the businesses in China will have to change their prices to keep up to date on the price level. Inflation affects the foreign trade and the exchange rate. Experiencing high rates of inflation, Chinas domestic products will be less competitive internationally. As the domestic products prices increase the demand for these products will fall and therefore the demand for Chinas currency will also fall, thus affecting the exchange rate. The cause of inflation in China: The cause of inflation in Chinas economy was expansionary monetary policies and rising wages. The inflation in China was caused by cost-push inflation. It means that the cost of firms increase, in this case it is higher wages, and the firms are forced to raise prices inorder to cover the costs. Cost-push inflation If the economy demands higher wages, the higher costs of labour will shift the SRAS curve to the left from SRAS1 to SRAS2. The price level rises from P1 to P2. Higher wages increase consumption and therefore increases aggregate demand from AD0 to AD1. The increased spending (and possible expansionary policies) move the economy towards equilibrium at Yfe but at a higher price level. We have now a round of cost-push inflation. Solution: In the article, it has shown that Chinas government is trying its best to avoid this issue but it has been said that it hasnt had much of an impact. One of the possible ways of reducing inflation is by subsidizing businesses. The government can give out subsidies to business so that the businesses can reduce their costs of production. This will then encourage the businesses to lower their prices and thus avoiding inflation. The problem here is that the government will suffer a huge loss if there are many businesses to subsidize. Another possible solution is by appreciating its currency. This is because if it appreciates its currency then firms will be able to buy cheaper raw materials and therefore will have lower costs of production. Thus reducing prices of goods. It can appreciate its currency by using its foreign currency reserves to buy its own currency and this will increase the demand for its currency. Even though this method will help businesses to reduce their prices, there are also negative consequences.