Purchasing Power Parity Theory And Discuss Its Applicability Economics Essay

Purchasing Power Parity Theory And Discuss Its Applicability Economics Essay Purchasing Power Parity theory (PPP) is a basis for economic comparison. However, can this really be true for any product at any time? Is purchasing power parity (PPP) only valid in the long run, or is it also applicable in the short run, and what about the nature of the products, i.e. tradable and non-tradable goods? Which limitations are there to PPP? Purchasing power parity tries to explain why the real exchange rate between currencies is what it is. It is based on the law of one price which states that in different markets, identical goods should have the same price. For goods which are easily traded, such as steel and iron, prices should be identical within relevant range. The reason for this is that if  £100 could get you 10kg of iron in the domestic UK market, or 5kg in the foreign German market, one would expect people to buy iron in the UK and sell it in Germany for a profit, taken into consideration that shipping costs are negligible, and that the iron is of equivalent quality. Demand for UK iron would rise and demand for German iron would fall. In the long run this would result in prices for domestic UK iron to rise and for foreign German iron to fall. The equilibrium here would be that  £100 could buy you 7.5kg of UK iron, or 7.5kg German iron. As the currency used in the UK and Germany is different we need to know how many British pound we need in order to buy one Euro. If you need  £15 to get a haircut in the UK and you need à ¢Ã¢â‚¬Å¡Ã‚ ¬10,50 to buy the same quantity (one haircut) in Germany, then the real exchange rate would be  £1.43 per à ¢Ã¢â‚¬Å¡Ã‚ ¬ found by the formula: which equals . This strength/purchasing power of one currency over another should be equal in the long run. Hence the name purchasing power parity. Rogoff argues that the difference between the actual currency exchange rate and the PPP exchange rate is.. PPP is only a theory as it cannot be proven to be correct, but until it is not disproved it is seen as a valid assumption. It is considered to be valid in the long run and not the short run, as people take time to realise and exploit profitable differences in markets which eventually leads to a long run market equilibrium. Michaely (1982) argues that the PPP, which originally came from Gustav Cassel, is indeed a monetary approach analysis; namely that it assigns the determination of the foreign-exchange rate to the money market alone, without allowing an explanatory role to the goods market and to goods prices. As the real exchange rates are affected by tradable goods as well as by services, different interest rates, speculators and investment, it is not the best method to compare the purchasing power of different currencies. Comparing GDP (gross domestic product) can be done if PPP is used to compare currencies on the bases on a basket of goods. We can differentiate goods and services in a basket of goods into two categories: tradable goods and non tradable/domestic goods. This is decided upon how easily transported/traded a good is as well as government policies such as bans, tariffs and quotas imposed on them. Tradable goods, (commodities) which are of equal quality no matter where they are produced, will be traded at a value close to the market exchange rate. Generally, any good that is easily transported belongs into this category. Highly tradable goods are raw materials such as gold, petrol, gas, oil and diamonds which have a high value. Non tradable goods that are produced and used by domestic consumers such as hairdressers, taxi costs, house rent, and books are hard to get exported, and as foreign people are unlikely to find a hairdresser whose price can compensate the costs of travelling, or move houses just because it is cheaper than the current one, the non tradable goods will be closer to the PPP exchange rate rat her than the actual market exchange rate. Whether a good is tradable or non-tradable does not only depend on how easily it can be transported. Books may be cheap in Germany and are easily transported, yet there is little demand in the UK for German books, as they are written in a different language. The same can be said about packaged food and laptops for certain countries that have different letters in their alphabet. Their PPP may be further away from the real exchange rate, as they would behave like non tradable goods. There are exceptions to this rule, such as expensive surgeries or medical care which is often much cheaper in east Europe than in west Europe. But are these of equal quality? The difference in price is due to different qualifications, less equipment and less experience. Eventually, in the long run, we would expect prices of east European doctors to rise, but there will still be a large enough price difference which is due to travel and quality difference. As PPP is based on a basket of goods and services, this already excludes ones that are not recorded. Many of these goods are not tradable, and hence are affected by the income level of these countries. However, there are goods in foreign countries that are purposely priced under international market price, in order to get a market share. For example, the German car manufacture Volkswagen produces cars in Germany and sells them in Poland for less than in Germany. Volkswagen does this because people in Poland earn less than in Germany, and they want to get a large market share. Some of these cars get re-imported into Germany to be sold under the domestic price. As Volkswagen cannot increase its price in Poland without losing customers and market share, car dealers in Germany will need to lower their prices in order to eventually get to equilibrium. Besides the obvious limitation to PPP that products are not always homogeneous, there is also the problem with apparent quality difference. A Product manufactured in England might be seen as of superior quality to the exact same product manufactured in China. Both products, even though they are equal, would have different equilibrium prices. PPP does not work in the short run, as people take time to take notice of opportunities to exploit differences in prices. It is only valid for highly tradable and valuable goods such as diamonds and gold, as these prices. Antweiler says that short run exchange rate movements are influenced by the news, such as announcements about interest rate changes, changes in the perception of the growth path of economic(2009). Pappell (1997) discusses that the difference between PPP and the real exchange rate can also depend on which countrys currency we base it on. This can happen because of regime changes or because governments are artificially interfering with the exchange rate in order to increase growth. Generally, the lower the income level of an economy is, the further away the PPP is from the real exchange rate, and the more an economy develops, the closer the PPP will be (RIETI 2003). An example of this would be China and its domestic currency Yuan whose exchange rate does not reflect the actual purchasing power of other currencies. This way they increase exports and have huge economic growth. With a common currency for multiple countries such as the Euro, it is easier to compare prices, as no calculations have to be made. The purchasing power of the euro is different across different Euro-countries (destatis, 2009). In theory, purchasing power parity theory is valid, yet its application has many limitations. It is an accurate explanation of why exchange rates change, but only for a certain basket of goods. Raw materials such as metals, diamonds and wood are easily traded and an international market equilibrium can be found fast. These goods are traded close to the real exchange rate. Non tradable goods such as packaged food are hard to trade and will be closer to the PPP exchange rate. Whether goods are of equal quality makes is a strong limitation to whether the chosen goods can really be compared. PPP is only a valid theory in the long run, as people take time to have to recognise and exploit the price differences. With a common currency across multiple countries such as the Euro, this reduces this greatly. Lastly government intervention with regulations, import taxes and tariffs affect the PPP as it makes buying foreign products more expensive.

Growth of independent grocers during challenging economic times Essay

The recent economic hardship had impact on many economic activities that led to freezing of credit markets, economic benchmarks plummet, imploding of financial institutions, closure of business entities and consumer spending plunges. Closure of organizations and business entities led to increased levels of unemployment since many employees lost their jobs (Stefanou Spiro, 1993). Consumer spending habits changed due to changes in earning ratio and operating on tight budgets. Small businesses such as independent grocery are affected by challenging economic times. Prices of commodities skyrocketed and this had an impact in ales volume by independent grocers. Businesses such as independent grocers braced a hard time but the fact that individual are entitled to basic needs such as food was the most fascinating aspect of groceries. Although the purchasing power of customers was low, independent grocers had to use certain business tricks to sustain growth during the period of economic hardship. The strategies developed by independent grocers were of great importance as they managed to sustain high demand of groceries. The most important concept adopted by independent grocers was to sustain growth during the period of economic challenges. Kraft Canada Inc. one of the major independent grocer in Canada opted to sell certain Canadian grocery assets to another company. In these challenging economic times, an important step measures the sustainability of growth through increased capital. Disposal of assets to other companies is a humble step as it boosts capital to be invested in other economic activities. Assets that are not in use for along period and remain idle should be disposed off to increase stock and cater for other expenses. As part of sustainable growth plan, independent grocers focus on core global and regional business that makes management of the business to achieve and maintain competitive advantage. The driving force that makes grocers to take such a step is pressure of economic hardships. Investing in portfolio that is strategically aligned with business strategies enables management to focus on time and resources as a way of achieving long-term growth. Time and resources are of essence in any form of business and they should be managed in a proper manner. Another major strategy developed by independent grocers in these challenging economic times is cutting down costs. This is achieved through reducing the number of employees or transferring some workers from grocery business to other investments. Employees in this kind of business provide services such as distribution, marketing, packaging and supplying of groceries. During the period of economic challenges, independent grocers can consolidate the functions of employees (Robinson Danielle, 2007). Marketing can be performed by those employees concerned with distribution. This means that employees will be in a position to carry various functions thus minimizing costs. Transferring employees to other investments or companies operated on independent portfolio grocers helps to increase production of goods and services. This alternative makes independent grocers continue to sustain growth during a time of economic hardships. Major areas of concern during transition period include provision of information technology, procurement, production and other support services. At the time of economic hardship, independent grocers are subjected to intense competition that results to poor performance of business. Economic hardship incorporated with competition makes independent grocers to face a lot of challenges. However, there are certain strategies developed by the grocers making them to continue sustaining growth. Customers are very important elements in this form of business. It is thus important to change their preferences in order to maintain demand for introduced products. This includes changing prices of raw materials and diet trends to favor market conditions and local economic. The capacity to change consumer preferences depends entirely upon continued promotion ability of a new brand. It also depends on respond to new consumer trends, competing with new substitute products in the market, and development of new products and markets. Dealing with consumer preferences by independent grocers entails monitoring products liked by customers. During the period of economic hardships, marketers in grocery business should learn how to introduce close substitutes of consumer preferences without affecting their demand (White David, 2000). At the time of economic hardship, certain products liked by customers may be scarce or sold at high price. Independent grocers can sustain growth through introduction of commodities that are similar in quality and value to commodities which are scarce and are highly preferred by customers. Sustaining growth by independent grocers during the period of economic challenges is a tough situation that requires making of concrete decisions and implementation. Changing tactics of operations should be done in a proper manner to avoid loosing customers as they play an important role in continuous growth of business. Lowering prices of raw materials has an impact in the price of final commodity as it reaches the consumer. Reduced prices of commodities attracts more customers and hence sales volume increases leading to expansion of business (Marber Peter, 1998). With the help of research, information and advice from business expert’s independent grocers can overcome challenges posed at the time of economic challenges. At these times of economic challenges, independent grocers should adopt the above strategies to sustain growth.

The Cider House Rules

TITLE (supplied by the customer): â€Å"The Cider House Rules† DESCRIPTION (supplied by the customer): The Doctor offers 2 incongruous services †¦ how can these services coexist? Answer the following questions: What is the moral dilemma posed in the story? A Birth occurs in the story †¦ how does this affect the main character's view? What happens to change the main characters view? What are the Cider House Rules and what are they a metaphor for? Who broke the Cider House Rules? What is the moral of the story? What does it mean to be the hero of your own life?What other issues arise in this story that are relevant to the reproductive and overall health? PROJECT DEVELOPED: The Cider House, an orphanage hospital at St. Cloud's, is one of the two poles or hemispheres the entire plot builds upon. The story poses quite a bit of a challenge to the unsophisticated onlooker's mindset trained primarily to distinguish between, and judge, the clear black and the clear white. Dr. Larch, one of the central protagonists, is a far more complex profile. It's not so much about his personality or character as it is about his moral stance. As a licensed physician, he assists at childbirth.The outside world formally knows him as helping a new life happen. The other side of the man is his second practice amounting to exactly the opposite: abortions, or life taking. He takes life away from infant and totally helpless human beings having little say in their parents decision not to grant them life. It might just be uncomfortable and awkward for these young mothers, pressed by their ambitious husbands, to grant life at this particular point. They are not prepared nor willing to pay that price for their right to have a fulfilling sexual life outside the bonds of marriage.However, the story is less moralizing than that. The author does not seem disposed to judge the heroes very strictly, because another part of the story is that these are for the most part inexperienced y oung men and women. They cannot possibly know as yet what's best for them over the long haul; no wonder their vague yet potent inner drives lead them to mistakes. They have not learned to assume the full responsibility for these mistakes, and they cannot accept the lot these blunders may inflict, early in their lives. Dr. Larch is deeply convinced about his duty to offer services of both kinds.Moreover, he chooses to hand over his skills to a young and promising disciple, Homer [17-20, 50-54, 78]. The latter has lived in the orphanage his entire life, and one would guess his moral values have largely if not solely been influenced and inspired by Dr. Larch's example. One wonders just how those polar practices could possibly be compatible, and for that matter conducive to the younger generation's upbringing. The young person shown early on that abortion is a possibility might likely stick with that option as a quick fix, never minding the longer-term good.So far, however, we have seen a somewhat superficial picture, and it's about time we dwelled on the multifaceted truth. Dr. Larch would never actually even consider abortion a way out-if this were a perfect world [56-58, 124]. The wicked world he finds himself surrounded by rules in wicked ways, supplies ugly criteria and makes one resort to interim compromises to secure a greater boon. This world is good at sermonizing when it comes to condemning the young women making mistakes; yet it is also incredibly cynical in calling on them to pay a price they cannot afford.Of course, we are not talking about the world that Dr. Larch had built-the Cider House. It is governed by ultimate rules that are observed strictly, not because of their tyranny, but because they are a natural moral code of integrity. All the little children living in there are orphans rejected by the wicked world, yet zealously loved by their father [80-110]. No, he is not their biological father-one other criterion of the formalist world, which per mits the distorted and destroyed relationships between the native parents and children.However, his own world's parameters identify him as their ultimate father. This cozy Cider House world is a tiny spot on earth where children love and respect each other, if only by virtue of the sense of alienation that the other world has cursed them with. Any encounter with the outside world is happy only for one of them: the rest of the kids will not be adopted that soon [84-89]. In fact, the big spotlight in the story is about the two poles or two alternatives facing the protagonists: their Cider home sweet home and the bitter world.The same applies to the central figure, Homer who is an extremely likable person and a fast learner, soon to become as skilled as his teacher. Yet without a diploma-another anchor of the outside world stressing the form, the superficiality, the illusion over the intrinsic value. Thus far, he has lived in this paradise which has a lot of bliss to offer. Yet, this w arm Eden could not possibly offer him the knowledge of good and evil, the knowledge he will have to receive in the outside world. Of course, for now Homer has nothing to compare it with-but soon an episode occurs that changes his life for good.A young lady, Candy, arrives for abortion accompanied by her boyfriend Wally, which occasion affords Homer a unique chance for exploring the ‘outer space. ‘ [172-215] He might never have unlocked his potential had he stayed ‘home. ‘ It was to be the outside world with its challenges and whims that could offer a learning environment. Homer turned out to be just as fast learner when it came to learning about himself. He proved to be good at human skills, and a fulfilling relationship soon began to evolve between him and Candy while Wally was gone delivering on his duty. 267-270, 320] Wally would come back some day, and Candy would have to choose, which was far from her forte. Indeed, she embodies the image of innocent pro neness to mistakes, whereby she had to make a lot of tasting, sampling and trying before she could decide what was right for her. And yet, like the many other young ladies Larch felt sympathy for (and would rather do the abortions than let them die in the butchers hands), she was deserving of the better lot. That experience was a major turning point in Homer's life. The main development was not that he actually liked the world he saw: far from it.Yet, when the doctor asked him to come back home where he was needed, loved and waited for (while the outside world had little to offer), it was already a different Homer to heed to those reasons [365]. He knew it was the only chance for him to learn to decide for himself and to take the responsibility. In fact, perhaps he had already long had that critical stance: he would swallow all the skills that Larch had to offer, but he was reluctant to justify abortion [131]. He therefore only had to learn or realize that he had that.Being the hero of one's own life might thus amount to standing ready to use the benefit of doubt, reserve the right to mistakes and face up to liabilities. That is by far the only way to really learn doing the right things, which is superior to just doing right things as under a benevolent and wise dictatorship. These mistakes should properly be viewed as a cost attached, which one would eagerly incur if the expected reward were abundant. This, of course, is not to justify the try-it-all approach, though wisdom is earned by learning too.The moral could thus pertain to the idea that this world is too complex and controversial, for a superficial judgment to suffice. The lesser evil may at times be viewed as a short-term cost or means securing the longer-term ends, provided the course is just. A cost is always attached to major decisions, though one is free to choose between the safe haven and the rough ocean. These are very different testing environments, in which people judge and are judged very d ifferently. Our superficial and hypocritical perception of the doctor might be rather negative at first, yet we come to see another picture on closer examination †¦

The Performance Of Jerrys Ice Cream House Business Essay - Free Essay Example

Sample details Pages: 7 Words: 2217 Downloads: 6 Date added: 2017/06/26 Category Business Essay Type Analytical essay Did you like this example? Daft, R. (2011), page 148, mention that entrepreneurship is the process of initiating a business venture, organizing the necessary resources, and assuming the associated risks and rewards. An entrepreneur is someone who engages in entrepreneurship. Don’t waste time! Our writers will create an original "The Performance Of Jerrys Ice Cream House Business Essay" essay for you Create order An entrepreneur recognizes a viable idea for a business product or service and carries it out by finding and assembling the necessary resources such as money, people, machinery, and location to undertaken the business venture. Entrepreneurs also assume the risks and receive and reap the rewards of the business. They assume the financial and legal risks ownership and receive the businesss profits. Jerry is a young graduate and has just started a new business enterprise. Jerry needs the advice of seasoned business executives to success. In task 1, is about review the performance of Jerry business. Performance is defined as accomplish of a given task measured against present known standards of accuracy, completeness, budget, and rapidity. In task 2, is identifying Jerry Companys business strengths and weaknesses. When doing business, company must care about the strength and the weaknesses. This is because, both of them will affect the company growth, profit, and etc. In task 3, is analysis the strengths and weaknesses of Jerrys business. Then, recommend a plan of action that will capitalize on the companys strength. And also overcome its weaknesses in the business. In task 4, is helping Jerry to do survey. There have some ways in which the business existing performance might be maintained and strengthened. Therefore, Jerry has bought a one-week return ticket to his holiday home in Penang. 2.0 Analysis Business Performance of Jerrys Ice-cream House 2.1 Business Performance Performance is defined as accomplish of a given task measured against present known standards of accuracy, completeness, budget, and rapidity. Have a good business performance is very importance before Jerry started up a business. 2.1.2 Performance of Jerrys ice-cream house Jerry is a young graduate and has just started a new business enterprise. Business name is Jerrys ice-cream house. The business is operated in year 15 Feb 2012. The location of Jerrys ice-cream house is in Greentown Ipoh, Perak around an industry area. Jerrys ice-cream house working hour per day is 12 hour, 10:00 a.m. until 10:00 p.m. In addition, every week of Tuesday Jerrys ice-cream house have one day is off day. Therefore, Jerrys ice-cream house just work six days per week only. Jerrys ice-cream house has provided few types of products such as ice-cream, cake, and beverage. Ice-cream has different types include permanent, rotators, sherbets, sorbets/ices, no sugar added, lighter side, and low fat ice-cream. Besides that, cakes also have different types that provide to the customer such as birthday, holidays, special occasions, sports and animals, elegant designs, and novelties cake. And the beverage also has few several types. For example, shakes, blast, and also fruit fusio n. Moreover, the price of the product that Jerry ice-cream house provide is general price to the customer. Cups and cones ice-cream generally is RM4, a sundae is RM8 and hand-packed ice-cream have three choices small, medium, and larger, there are RM10, RM20, and RM30. The packaging of the ice-cream has few types, it includes cups and cones, sundaes, or pre-packed quarts. Difference type of packaging can attract the customer because different customer has different needs. In addition, customer also can buy hand packed. Customer can bring home the favourite ice cream to enjoy whenever they want, choose from any of the delicious flavours available in our dipping case. Hand-packed ice cream is available in small, medium, and large. 2.1.2 Conclusion In the conclusion, Jerry is a young graduate. Besides that, Jerry does not have any experience to operate a business and also just started a new business recently. Therefore, must give some advice to Jerry on how to strengthen of his business and also must let Jerry understand the business performance. 2.2 Strength and Weaknesses 2.2.1 The Strength of Jerrys Ice-cream House First, the strength of Jerrys ice-cream house is has more than 100 flavours of ice-cream in the library include permanent, rotators, sherbets, sorbets/ices, no sugar added, lighter side, and low fat ice-cream. There are so many choices let the customer choose their flavour and it can also satisfy the customer needs. Therefore, customer does not feel weary because still got a lot of flavour provide to the customer. Besides that, the strength of Jerry ice-cream house is providing several services for different age group customer. Jerrys ice-cream house focus customer range is very widely, it includes children, teenager, adults, and old people. This is because, Jerry wants everyone also can enjoy it. In addition, the strength of Jerrys ice-cream house is it has lower price of the product that provide. Compare with other shop, the product of Jerrys ice-cream house is cheaper than other. For example, Haagen-Dazs also provide ice-cream but the ice-cream is very expensive. Therefore , not all customers have ability to purchase their product. Just only the high class people can enjoy it 2.2.2 The Weaknesses of Jerrys Ice-cream House Besides the strength, Jerry ice-cream house also have their weakness. The most important is the capital in the business. Capital is in order to produce certain goods or in order to create and maintain the proper environment for offering certain services. New businesses often find themselves in working capital crunches. Without working capital, Jerrys ice-cream house cannot build inventory or purchase raw materials. As a result, Jerry cannot sell enough products to generate the profits needed to rectify this situation. This is extremely dangerous and can be destabilizing for the shop or even cause it to collapse. With a capital loan working for you, you can make sure that your business gets a strong start. Another weakness is Jerrys ice-cream house does not have doing advertisement to promote the business. Advertising is the most important part in the business. The reason is, advertising is an advantageous representation of product to make consumers, customers and general public know of the product. It lets the potential buyers, general public and end users to be familiar with the brands. 2.2.3 Conclusion In the conclusion, the strength of a business organization refers to the capacity by which an organization can gain advantage over its competitors. Environmental analysis helps the business organization to find out its strength. After that, it can make the policies and plans to expand the business and to take advantages over competitors. In addition, according to Trehan, M. et al. (n.p.), page 24, said that the weakness of a firm refers to limitation of a business firm. It results in significant disadvantages for a firm in comparison to its competitors. The environment analysis helps is to find out the weaknesses of the business. For future growth and expansion of the business, decision-making should make plans to overcome the weaknesses. 2.3 Plan of Action Plan of action is an order of steps that must be taken, and the activities that also must be performed well for a strategy to succeed. Therefore, the plan of action can help Jerry to improve the ice-cream house. 2.3.1 Overcome the Weaknesses First, the strength of Jerrys ice-cream house is has more than 100 flavours of ice-cream in the library. There are so many choices let the customer choose their flavour and it can also satisfy the customer needs. Jerrys ice-cream house must continue create different types of flavours products and also produce some creative product to attractive customers especially the children. As a result, this way it can maintain the existing customer or new customer come to Jerrys ice-cream. The strength of Jerrys ice-cream house is the products that selling the lower price to the customer. Therefore, Jerry must maintain this strength because the price as a competitive advantage. Competitive advantage is means that the lower prices or providing greater benefits and service that justifies higher prices. Moreover, also can defined as an advantage over competitors gained by offering customers greater value. Besides the strength, Jerry ice-cream house also have their weakness. The most import ant is the capital in the business. Capital is in order to produce certain goods or in order to create and maintain the proper environment for offering certain services. Overcome this capital problem it has so many ways such as, franchising, strategic alliance, join venture, license the product, and others. For example, license the product it can be an effective and lower cost growth medium, particularly if Jerrys business have a service product or branded product. Next, overcome the weaknesses of Jerrys ice-cream house about the advertisement, it can create a website to advertise the business. There has many advantages using website to advertise the business. It has cheap market research, use features on your website such as visitor polls, online surveys and the website statistics to understand the customer needs and wants. And also how customers feel about certain aspects of the business to determine how can improve the product and the way to do business. Besides that, it is a growth opportunity. This is because, website serves as a great place to refer potential investors to, to show customers what your business is about, what it has achieved and what it can achieve in future. 2.3.2 Conclusion In the conclusion, the above are listed out the plan of action that can help Jerrys ice-cream house to overcome the weaknesses of the business and also can strengthened Jerrys business. In the end, these will improve Jerrys business. 2.4 The Ways Maintained and Strengthened Jerry has bought a return ticket to his holiday home in Penang. Besides that, Jerry need for help to do survey to get some ways in which the business existing performance might be maintained and also strengthened to his business. After help Jerry investigate, it has few ways on how to maintain and strengthen Jerrys business. 2.4.1 Ways to Maintained and Strengthened Jerrys Business The first way to maintained and strengthened Jerrys ice-cream house business can use the strategic alliances. According to Michael, M. et al. (1995), page 4, mention that a strategic alliance links specific facets of the businesses of two or more firms. Strategic alliances is partnerships between and organization and a foreign company in which both share resources and knowledge in developing new products or building new production facilities. If Jerrys ice-cream house strategic alliance with others shops, it can help the shop to increased brand awareness. This is because, the opportunity to grow market size with a partnership presents the additional opportunity to increase awareness of the brand. One of the key elements of a business success is constant, growing brand awareness. Besides that, strategic alliances allow Jerrys ice-cream house to reach a broader audience without putting in any extra time and capital. In addition, when Jerrys ice-cream house face the financial probl em it also can sharing the financial risk. Enterprises can make use of the strategic arrangement to reduce Jerrys ice-cream house financial risk. For example, when two firms jointly invested with equal share on a job, the greatest potential that each of them stands to lose is only half of the total job cost in case the venture failed. Next, is Jerrys ice-cream house can turn his business into franchise to maintained and strengthen the business. According to Gappa, B. (2001), said that franchising is a business strategy for getting and keeping customers. It is a marketing system for creating an image in the minds of current and future customers about how the companys products and services can help them. It is a method for distributing products and services that satisfy customer needs. For example, advertising can be one of the biggest expenses for any new business. Jerry cant survive without effective advertising and also effective advertising is expensive. Although Jerrys ice-cre am house have a good location, if the customers are unfamiliar with your business what have to offer, they also wont come in. Franchises offer national advertising campaigns that are included in the franchise fee. This is a huge advantage for Jerrys business. 2.4.2 Conclusion In the conclusion, there have many ways to maintained and strengthened Jerrys business. Besides that, there also have a lot of advantages. If Jerry changing the ways to operate the business. After few months later, Jerrys ice-cram house can become a famous shop in the state. And also Jerrys business can expand to another location or expand globally. 3.0 Conclusion and Recommendation After done my entrepreneurship assignment, I know that business performance is very importance before started up the business. Performance is defined as accomplish of a given task measured against present known standards of accuracy, completeness, budget, and rapidity Task 1, is about the review the performance of Jerrys ice-cream house. Task 2 is about the strength and the weaknesses of Jerry ice-cream house. The strength of a business organization refers to the capacity by which an organization can gain advantage over its competitors. Contrary, the weakness of a firm refers to limitation of a business firm. It results in significant disadvantages for a firm in comparison to its competitors. Task 3 is about overcome a weaknesses of Jerrys ice-cream house. After done my research, I have found some ways to recommend a plan of action that will capitalize on Jerrys ice-cream house strengths and also few ways of how to overcome the weaknesses in the business. Task 4 is about t he methods in which the business existing performance might be maintained and strengthened Jerrys ice-cream house. During research, there have so many ways to maintained and strengthened the business.