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managerial economics

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managerial economics

Category: Exploratory Essay

Subcategory: Management

Level: College

Pages: 4

Words: 2200

Software Development Company
Name
Institution of affiliation
Date

EduTechSolutions Software Development Company
Software Development Company commonly referred to as a software solutions company is a company that specializes in the delivery of a range of software products. The software products may be general or domain specific. General software developers offer solutions for software from all sectors of the economy. On the other hand, domain specific software solutions target a given sector within the economy. In this case, EduTechSolutions Software Development Company targets education based software solutions. The company aims at providing software products that might be of great help to all learners from lower schools to the tertiary institutions.
EduTechSolutions Software Development Company is built on the ground that Information technology is still advancing, and new solutions flow in regularly. This dynamism in Information Technology makes the field a great potential for profitable investments. Education is one of the main sectors of an economy that requires a high level of modernization. Having software products that target education sector will bring greater investments in the education by making it highly accessible by all, affordable and favorable to all. The company targets offering solutions that are either institution based, that is, the solutions are deployed or given at an institutions level. Also, public based solutions that can be accessed via the internet.
EduTechSolutions Software Development Company idea is feasible. The market is just more than enough. It is, therefore, a goal that a little bit of product differentiation is a major strategy to be employed by the management in the aim for the prosperity of the company. Based on the managerial economics theory which states that,…, the analysis of EduTechSolutions Software Development Company under the demand estimation and forecasting; elasticity of the software products, the target market structure, the production cost, the company goal and the satisficing comes as explained below (Dean, 1951).
Managerial economics is simply an application of the economic the economic theory together with the analysis tools for decision science. This application is useful for determining how a firm can efficiently realize its goals and objectives. There is a difference between economic and managerial theory, the Managerial theory is a normative while on the other hand, Economic theory is both normative and positive in nature. Economic theory tends to focus on the economic aspects of the concern, on the other hand, managerial theory tends to consider both economic and non-economic issues to the problem at hand (Baye & Beil, 2006).
EduTechSolutions Software Development Company aims at producing software products that can be used locally within the user environment. These products can either be installed on the users’ computers and smart devices or accessed online through a public network. The nature of availability of these products gives a wider market for the products, and this increases the demand for the products geographically.
EduTechSolutions Software Development Company aims at producing software solutions that can be used throughout the world by learners and tutors. Given the approximate number of learners at various education levels, and the number of education institutions, the demand for the products is estimated to be high (Dean, 1951).
EduTechSolutions Software Development Company products will target individuals from lower primary schools to the university. Despite the existing firms and companies that are in the same line of business, the wider market provides a motivation behind the idea. However, during the feasibility analysis phase, it was realized that the education sector still lags behind in Information Technology developments and, therefore, the business opportunity. The demand for the software products is aimed to be dictated by the number of people who uses the products. Provision of high quality and cheap education accessories and aids is the key to boosting the products demand. Despite the many existing firms in software developments, few, if not none, have taken education as their major focus to offer solutions to the education sector.
This opportunity of insufficient exploration of the Information Technology in Education is the competitive drive of EduTechSolutions Software Development Company. The company is expected to start on a low scale, but advances as the demand for the products increases through quality enhancement and proper clients support. The focus will be on clients’ satisfaction in taking education to the next level through the use of easily accessible and user-friendly software products. Through this drive, the company id forecasts to a greater levels of growth shortly. The larger, or rather a worldwide target market is a potential for a higher level of demand.
Education never stops at any point in the year. The only fluctuations in the activities come in the running and definitions of the various academic calendars. However, the products are expected to exhibit different behaviors depending on the product and the time of the year. The elasticity of these products by EduTechSolutions Software Development Company will be therefore mainly be affected by the aspect of time. Nevertheless, this effect will not cut across all products but just within some of the products. There will be different behavior for different products.
The products that target students while at school are expected to have very low demand during the holidays or the winter and summer breaks. The acute drift in demand from high to very low makes the product to have a perfect elasticity. On the other hand, those products that do not target students or even pupils while at school, will not be affected much by such breaks. When considering price elasticity of demand, nature will cut across all the products given that at some point, the product may grow to become necessities to education success and another achievement. Just like some of the tools we use as learners today, despite the increase in price, the demand for the products remains constant.
Those products that do not target schools when on sessions will, therefore, be inelastic if not perfectly inelastic. EduTechSolutions Software Development Company targets to invest more in those products that will exhibit in-elasticity of demand as a result of any product demand determinant change. This option of focus will ensure slight changes in profit margins. This option gives the company a consistency in revenue generation which is the main aim of every business or company. But, the company will also offer those products that are mainly used during schools’ sessions to take advantage of the global difference in the academic calendar which will ensure that the revenue never gets to zero.
EduTechSolutions Software Development Company has a determination to reduce the elasticity of demand of its products to keep the revenue realization at almost a constant level. Through this technique, a constant flow of revenue throughout the year is expected. The company’s products will, therefore, be usable both at schools and at home to improve the academic performance of the students and also offer other related assistance.
EduTechSolutions Software Development Company targets to operate in an environment with freedom of operations. The company aims at operating in an environment where it is only the factors for demand and supply that affects its operations. The market structure in which the company will operate is therefore perfectly competitive market. In this environment, the competition is open, entry and exit into and from the market are at will. Software development is one of the industries with a greater level of freedom for the investors in the same sector (Baye & Beil, 2006).
Software development involves a simple identification of opportunity and proceeding to the implementation. There are very few barriers other than the common company start-up requirements and other regularities. Once all the company requirements have been met, the idea simply moves to the realization stage, where the plans are actualized. A perfectly competitive market gives the company a freedom of operations without several barriers compared to other market structures. This structure also gives the market freedom to grow to the highest levels despite the existence of competitors within the market.
EduTechSolutions Software Development Company is expected to have an average cost of production because most of the assets are one time purchases. A software development company requires office space and the furniture, computers and the associated software as the basic requirements. Another requirement is the personnel that must be skilled in computer programming and other application development. It is only the personnel and space rental charges that have a recurrent cost as they must be paid periodically, depending on the initial agreement. Other costs like the acquiring of the computers, the related software, and the furniture are one time purchases.
Due to the depreciation of the computers and the associated applications, the cost of production might go high during those times of upgrades and maintenance. Also, software gets outdated and, therefore, a call for new software. However, this is a cost that the company incurs after a long time of operations. For a start, the company needs like ten workstations, where workstations consist of a computer, a chair, and a table. But this number is expected to grow as the company expands and the demand for the products grows even higher.
The skilled labor required in the company consists of programmers, marketers and customer relation personnel. A combination of the above forms the major departments of the company. These departments run under a leadership structure; that is every department is assigned the departmental head. The hiring cost of the labor is expected to form the major percentage of the production cost. Other costs expected includes the advertisement cost, the internet cost, and the cloud services charges costs.
Every business goal is profit realization and loss reduction. At EduTechSolutions Software Development Company, other than just profit realization, there are other goals which the company is determined to be able to achieve. The first goal is to better education globally through the provision of affordable assistance to learners. They say education is power, at the company, we’ll recognize this fact and strive to ensure that learning process is simplified through the application of appropriate technology.
Another goal is the employee motivation and satisfaction. At EduTechSolutions Software Development Company, a favorable working environment for the employees will be a key. Employee motivation and satisfaction are other aspects that the company intends to invest in so that the best can be achieved by the employees. The complaints from the employees will be a priority, and the complaints must be responded to accordingly. Every firm or even company that aims at achieving the best out of their employees must be ready to treat the employees as they would want them to treat their best customers. This good company-employee relationship is, therefore, another major goal of the company (Baye & Beil, 2006).
EduTechSolutions Software Development Company also targets the improvement of the community around through offering services like; Information Technology training and other related courses to the people around. Other services include holding of award winning competitions in technology-based competitions and through these competitions, the company aims at getting the best-skilled labor. In other words, this is a way for employment creation to the society. Some other services include the donation of old computers to study centers, offering free Information Technology consultation services among others.
Otherwise, the company aims at adopting the proper business structure to help satisfy the needs of the prospective customers. One of the major focus to ensure complete customer satisfaction is a strong customer support systems. EduTechSolutions Software Development Company hopes to adopt a very robust and powerful customer support systems that provide customer views, complaints, suggestions and recommendations. All this information will then be acted upon to perfect on the production and ensure better service delivery. The company targets various customers that must be satisfied at their own level of requirement.
An intensive customer problem understanding and requirement analysis must, therefore, be perfect. When the customer needs are properly put into consideration, the best product is expected (Salvatore & Brooker, 1953). At EduTechSolutions Software Development Company, customer consideration will be key to the software products productions. Customer satisfaction is the only way to getting more and more customers. The company is, therefore, prepared to invest highly in those mechanisms that will see the customers stick with the company and not move away.
Some of the major managerial decisions that must be made are in regards to the technologies adopted in the realization of the products, the location of the company head offices and also the methodologies to be adopted in the realization of the software products. These decisions must be properly made because they dictate the success of the company. The company management must compose members with required expertise to understand different sectors that are key to the company prosperity. The choices made by the managerial committee must be those that will bring success to the company and not kill it (Salvatore & Brooker, 1953).
Finally, EduTechSolutions Software Development Company idea is viable and has a higher estimated profit index. It is expected to start as a small company but grow to become a large scale venture. It is expected to become one of the best companies in the world associated with education software and other online education services. The company is expected to grow within a perfectly competitive environment due to the nature of the target market (Salvatore & Brooker, 1953). The company aims at improving the global education level through its goals other than profit making and loss reduction. The company also targets a creation of employment opportunities with the best working environment for all its employees.
References
Baye, M. R., & Beil, R. O. (2006). Managerial economics and business strategy (Vol. 5). New York, NY: McGraw-Hill.
Dean, J. (1951). MANAGERIAL ECONOMICS.
Salvatore, D., & Brooker, R. F. (1993). Managerial economics in a global economy. New York: McGraw-Hill.

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