The purpose of this study is to measure the microeconomic factors impacting a UK concern administration and a merchandise within their scope. The company highlighted is Panasonic UK Ltd and the merchandise this study has been based around is the Viera 3DTV. Panasonic entered the disturbance of the 3D revolution in June 2010 with the universe ‘s first 3D plasma theoretical account. This merchandise presently retails at an mean monetary value of ?1500. In this study I will do some premises, as due to the engineering being new, there are no dependable figures available for analysis at this clip.


Panasonic began life as Matsushita Electric Housewares Manufacturing Works. It was founded by Konosuke Matsushita in 1918 and has expanded to a planetary corporation. Panasonic UK Ltd was established in 1972 and has its central offices in Bracknell, Berkshire. The company in the UK employs in surplus of 500 staff and has an one-year turnover of more than ?700m. The company is a major provider of consumer and concern electronic goods runing from cameras to kitchen contraptions.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now


The definition of demand is the sum of goods or service that a consumer or group of consumers will desire to buy at a given monetary value.

The Law of Demand states that there is an reverse relationship between monetary value and the measure that will be demanded, which in kernel refers to the fact that if monetary values rise so demand falls and if monetary values fall so demand rises. Due to this negative relationship, when exemplifying this by manner of a graph the demand curve will ever incline downwards.

There are two chief grounds for the theory behind this jurisprudence:

Income consequence – as peoples income alteration they will hold more or less disposable income to pass on goods and services

Substitution consequence – if the monetary value of a merchandise or service additions it is more likely that consumers will buy alternate ( replacement ) goods and services and if the monetary value of a merchandise or service lessenings so consumers are less likely to buy options ( replacements ) .

This theory has been challenged nevertheless by a UK economic expert Sir Robert Giffen ( 1837-1910 ) who foremost studied and reported the paradox that a merchandise may see an increased demand when the monetary value rises and reduced demand for when the monetary value falls. This is chiefly a theoretical construct, but at that place have arguably been goods with this belongings.

When discoursing the rules of economic sciences the term ‘ceteris paribus ‘ is on a regular basis used which is Latin and means “ all things being equal ” . This is used to insulate a description of events from other variables.

In the instance of the Panasonic 3DTV it has its ain set of factors that will impact the demand for the merchandise. In my sentiment the chief factors will be:

Consumer gustatory sensations and penchants – Due to recent increased promotion and high profile movie developments in the film with the release of films such as Avatar, I believe that this will hold a large influence on the consumers ‘wants and desires ‘ for this new engineering. A recent survey saw a 20 % addition in the size of the audience who said they are ready to purchase a new Television to acquire the 3D experience since the release of the Avatar film. This would hold the consequence of increasing demand. ( graph line D1 ) 3d incrase.jpg

Income- In my sentiment the demand for Viera 3DTV will be being held back at the current clip due to increasing macroeconomic force per unit areas go forthing consumers with less disposable income and hence although they may want the engineering it will be more hard to be able to afford the good at its current pricing degrees hence if this decrease in disposable income continues this will hold the consequence of diminishing demand.

Substitute Goods – I believe that the Viera 3DTV has many near replacements that will impact its demand as all the major makers develop their ain 3DTV ‘s in the effort to acquire their market portion. Pricing in this instance is really of import therefore if the monetary value of other makers ‘ merchandises decreases the demand for the Panasonic would diminish. Complementary Goods – the 3D engineering has complementary goods associated with it such as 3D spectacless and 3D blueray participants. The monetary value of these will impact the demand for the chief engineering as at the current clip you can non take advantage of the 3D benefits without these hence if the monetary values of these lessening so the demand for the complementary telecasting would besides theoretically increase.

The Consumer outlooks about future monetary values and merchandise handiness – some consumers may wait until the engineering for 3D becomes established earlier buying as they expect the tendency to be take downing in monetary value.

The undermentioned graph will exemplify the effects of these factors on the demand for the Viera 3D telecasting.

Addition in demand curve ( displacement to the right ) increase supply curve.png


The definition of supply is the sum of a good that manufacturers are willing and able to offer for sale at assorted monetary values.

In contrast to the Law of Demand, the relationship between supply and monetary value is a positive 1. As supply additions so monetary value lessenings and as supply decreases monetary value will increase, hence for the intents of exemplifying supply the supply curve are upward sloping.

The point at which the demand and provide curve meet is called the market equilibrium and shows the optimal degree at which the sum demanded is equal to the sum supplied.

Market equilibrium diagram Simple_supply_and_demand.png

There are once more many factors that can hold an influence on the supply of a good and in the context of the Viera HD 3D telecasting I consider them to be as follows:

Cost of resources and natural materials- if the cost of such points is high so it is likely that the supply of 3DTV ‘s will be restricted due to budgeting restraints of the company as they can merely fabricate as much of the merchandise as they have adequate stuffs and labor to apportion to this.

Production engineering – 3D engineering has been around for many old ages nevertheless at that place has until now non been the engineering in topographic point to bring forth the merchandises on a high consumer graduated table, hence as the ways of fabricating the goods gets easier it means that companies can increase their production.

Taxs and subsidies – if goods or natural stuffs are extremely taxed the supply will be limited due to money restraints within a company nevertheless if a good is subsidised the company have greater financess to buy stuffs etc… therefore they are able to bring forth more

Profitableness of alternate goods – If other goods in a company ‘s scope are more profitable Internet Explorer. Cameras alternatively of Television ‘s so the provider may concentrate its operations on such merchandises to increase their net income borders and bound production of others

Increase in supply curve ( displacement to the right ) increase supply curve.1.png

Decrease in supply curve ( displacement to the left )

lessening in supply curve.png


“ Elasticity measures the per centum reaction of a dependent variable to a per centum alteration in an independent variable. ” Valentino Piana ( 2004 )

Elasticity measures the extent to which demand will alter.


There are three chief steps of snap of demand that I will measure in the context of the Panasonic 3DTV.

Price snap of demand – ( P.E.D ) is calculated as the per centum alteration in measure demanded divided by the per centum alteration in monetary value. The consequences of this equation will bespeak the reactivity of the measure demanded if the monetary value alterations, with a P.E.D. of less than one bespeaking an inelastic good and a P.E.D. of greater than one, reasoning that a good is elastic.

In the context of the Panasonic 3DTV it is my sentiment if figures were presently available so the P.E.D. would be greater than one screening that this peculiar good is elastic. My concluding for this is that this merchandise has near replacements from other electronics makers which consumers are likely to exchange their penchant to should the monetary value of this good addition. Besides this type of telecasting I believe to be a luxury point and a big proportion of consumer income would be used to buy this engineering. Due to this I believe an addition in monetary value would potentially hold an extended negative consequence on the demand for the good.

The information from this expression can besides be really utile to a house when make up one’s minding on its pricing scheme and its affect on the company ‘s entire gross as highlighted in the graph below.


Cross snap of demand – ( X.E.D. ) is defined as “ the reactivity of demand for one good to a alteration in monetary value of another ” ( Sloman 2008:56 ) is calculated as the per centum alteration in the measure demanded of good Y divided by the per centum alteration in the measure demanded of good Ten. The result of this equation will assist to measure whether a good is a complementary good or a replacement good.

Below -1

-1 to 0


0 to 1


Strong complementary good

Weak complementary good

No relation

Weak replacement good

Strong replacement good

For the intent of associating this theory to my study I have chosen to measure the cross snap of demand between the Panasonic Viera 3DTV and a Sony Bravia 3DTV. In my sentiment, if figures were available the consequence of the X.E.D. equation would be over 1 as I believe two 3DTVs are really similar in engineering, size form and map hence if the monetary value of one were to increase the demand for the other makers merchandise would increase proposing a strong replacement relationship between the two merchandises as highlighted above.

However I do believe that the Panasonic 3DTV has many regards such as 3D satellite telecasting, 3D spectacless, 3D picture games, 3D Blueray participants which would ensue in a negative consequence. The extent to which these complements are yet to be seen nevertheless as the engineering is still in the early development.


Income snap of demand – ( Y.E.D ) is defined as “ the reactivity of demand to a alteration in consumer incomes ( Y ) ” which “ enables us to foretell how much the demand curve will switch for a given alteration income ” ( Sloman 2008:56 ) measured as the per centum alteration in the measure demanded divided by the per centum alteration in income. “ .

The consequence of this equation demo the type of good and this tabular array explains why.




Inferior good

Normal good

Superior good

Addition in income= lessening in demand

Increase in income = addition in demand

Increase in income = greater addition in demand

In the instance of my chosen merchandise in my sentiment the result of the Y.E.D. equation would be that the 3DTV is presently a superior or luxury good. The new engineering will be up at that place on a batch of consumers list of wants nevertheless the monetary value of the good would intend a high proportion of income would necessitate to be spent to get one. It could be said that in the current economic clime the demand for these types of goods reduces as incomes cut down and people switch to necessities instead than luxuries.


The extent to which a market or industry can be described as competitory depends on how many rivals it has and how this affects their pricing and besides the easiness with which new concerns can come in and go out a peculiar market or industry in the long tally.

The three chief descriptions are:

Perfect competition – an industry or market that has really few or no barriers to entry or issue, has many rivals and is a “ monetary value taker ” as they do non order the monetary value of their goods/services.

Oligopoly – an industry or market that is dominated by a little figure of big houses, there are few barriers to entry and issue, few rivals and if one house puts up the monetary value others tend non to increase their monetary values, nevertheless if a house drops its monetary values the other houses in this market will be given to take down their monetary values besides, for illustration supermarkets.

Monopoly – is where the market is the house or has more than a 25 % portion of a market. There are many barriers to entry and go out the market and monopoly is a “ monetary value shaper ” as they can order the monetary value of goods and services as there are in theory no rivals, for illustration the Post Office.

In footings of Panasonic UK Ltd as a company, it is my sentiment that the company operates within an oligopoly. My concluding behind this is that Panasonic does hold rivals in the signifier of the likes of Sony, Samsung, LG, Toshiba and Sharp. There are a few barriers to the entry of the industry such as premises, quality and stigmatization and a few barriers to go out besides.

The most effectual manner of showing the market construction and its consequence on pricing is via the diagram below by plotting a kinked demand curve. This shows that Panasonic raises the monetary values of its 3DTV ‘s above the traveling rate it will lose a batch of gross revenues to its challengers i.e. Sony and Samsung. However if Panasonic reduced it monetary value for the HD 3D telecasting below the traveling rate it will non derive many client because its rivals will be forced to fit its monetary value cuts to keep their portion of the market.