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To understand the important role that business plays in the economy and its influence on your standard of living, imagine a world in which you personally had to produce everything you consume. You would have to grow your own food, sew your own clothes, cook all of your meals, and build your own car, computer, cell phone, house, and furniture. It would be impossible to actually complete all of these activities on your own. Only a fraction of these activities could be completed because it takes a lot of time and resources to learn how and to build a car, computer, house, and so forth. Time and resources are scarce, and people have to make choices about how they spend them. Because business is present in the economy, we are able to consume and enjoy many more goods and services than we otherwise could if we had to produce everything on our own. You eat food that is grown and often prepared by someone else. Your clothes are sewn by someone else. Your car, MP3 player, computer, and cell phone were produced by someone else. The movies you watch and the music you listen to were all created by someone else. If you produced everything on your own, you would have little access to medical and dental care. These items are a part of everyday life and would not be available if not for markets and business. For-profit and nonprofit organizations play important roles in the economy. For-profit organizations produce goods and services, and provide employment with the primary goal of generating financial gain, whereas nonprofits are not in the businesses of financial goal. They employ people, take in revenue, and provide goods and services with the fundamental goal of serving humanitarian or environmental needs. For-profit organizations help raise the standard of living through taxes, which the government spends for providing the facilities to the people, and for the well-being of the society. They also support nonprofit organizations. If no changes are made to current federal fiscal policy, the economic impact of that policy will shift from acting as a small drag this year to subtracting 1.7 percentage points from real GDP growth in 2012. For context, at the peak of the federal fiscal stimulus in 2009, federal policy added 2.6 percentage points to real GDP growth. Yet as the impact of federal policy shifts from a stimulus to restraint, the private sector must grow faster for the economy to simply grow at its potential. In 2012 that potential is estimated at 2.7%; to reach it, private sector GDP would need to grow well above 4%. That seems unlikely given the weak pace of recovery. Unanticipated changes in monetary policy will produce both price (substitution) and income effects. For example, suppose monetary authorities begin a program of expansionary (easy) monetary policy. We know that monetary policy has an important effect on the behavior of the economy (e.g., income, employment, investment). Most theories of how exactly this happens rely on "nominal rigidity" in wages and (or) prices. In other words monetary policy affects the economy because firms and workers respond to increases in liquidity by increasing production instead of increasing wages and prices. Empirical evidence assessing the importance of wage rigidity in the transmission mechanism of monetary policy is, however, very scarce. The Product or service I choose would be Ford. It was founded by Henry Ford and incorporated on June 16, 1903. The company sells automobiles and commercial vehicles under the Ford brand and luxury cars under the Lincoln brand. In the past it has also produced heavy trucks, tractors and automotive components. Legal Environment Governments such as in the United States have now taken into consideration the importance of safety regulations and eco-friendly products. We have a social responsibility to take care of the environment and hybrid and electric cars are the answer. There will not be a significant gain in hybrid auto sales by 2013, however research has proven that within 10 to 20 years, individuals will come to realize the personal and environmental benefits of owning a hybrid vehicle. Media Environment • Automotive companies on average spend $50-$100 million on Page 6 marketing/advertising • Ford Spends about $80 million • Money goes towards Social websites, their website, print, television/commercials, radio, outdoor campaigns • Specific Media works with a number of Fortune 500 brands including seven of the top 10 companies. No other media company gives advertisers the ability to reach their target audience online with nearly 100% accuracy. • Specific Media is headquartered in Irvine, California, with offices in New York, San Francisco, Los Angles, Chicago, Dallas, Detroit, and Fort Lauderdale. SWOT Analysis Strengths • Wide geographic presence • Brand reputation • Strong portfolio of quality products Community Relations. Ford’s focus has shifted emphasis from trucks and SUV’s to cars and crossover vehicles. This conscious change has also caused them to drop luxury brands such as Land Rover, Jaguar and Aston Martin. These high end brands consumed Ford’s resources, distracted management and didn’t provide enough incentive to maintain. By understanding the consumer and focusing their attention on their needs and wants, Ford has successfully reinvented their brand to be quite desirable among consumers. Ford understands the importance of innovation and has made conscious efforts to keep ahead of their competitors. For example, an electronic version of the compact sedan “The Focus” was introduced in 2011. Since there presently is not a large demand for electric vehicles, some companies may be hesitant to take the financial risk that is associated with developing a new vehicle. William C. Ford Jr., Ford’s Executive Chairman stated, “We don’t know what the market is going to be for electric vehicles….But we will be ready for the demand whatever it is, whether it becomes 10% or 90% of the market.” Ford is anticipating the needs of its customers and finding ways to provide quality and innovative products and implementing a global strategy by introducing an electric vehicle. Finally, Ford has initiated several changes in how they market vehicles. Diversity of marketing is created by the customers Ford wants to reach, rather than the differences in the vehicles. This allows for fewer advertising campaigns per product and creates a more tailored target market. Having a specific group of people to target improves your return on investment with advertising and also allows Ford. To make changes in their vehicles that will entice consumers to stay loyal to the brand. Ford US Sales US Car and Light Truck Sales. I would also use Ford as my organization. I believe the social responsibility Ford holds to society is high. You have to be able to trust the persons responsible for making your transportation. Society drives there family and friends around, they have to know whether its safe for them or not. The social responsibility Ford holds is to maintain a safe industry along with their stakeholders or anyone else involved in the making of a vehicle.

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