Break-even analysis allow managers to better determine what their goals should be, but it can cause them to not consider other factors. It is a core component of making business decisions. However, it must be used cautiously.Know More
Break-even analysis is crucial for people considering launching new products. Used correctly, it can help companies determine which products to develop and which to table. Performing a break-even analysis forces people to calculate their costs as accurately as possible, which can lead to helpful insights.
However, break-even analysis only measures a few factors involved in the sale of a product, and these numbers need to be estimated. In some cases, people might underestimate fixed costs or fail to account for factors that can affect the variable cost. Critically, break-even analysis requires companies to determine which price will work best, which is inherently difficult.
A break-even analysis can also stop companies from taking chances. Losses are a part of business, and companies might fail to realize certain benefits that putting a particular product on the market can generate. For example, a product that is likely to generate word-of-mouth buzz might sell better than analyses suggest, and products that get a brand's name and logo out might be worth absorbing some small losses.Learn more about Economics
Supporters of labor unions argue that they give allow workers greater opportunities for securing higher wages, benefits and better working environments, while opponents criticize labor unions on the grounds that they escalate prices for market goods and make employment markets less competitive. Those in favor of labor unions contend that without unions, workers would be subject to lower living standards, less safe working conditions and discrimination. Contrarily, others assert that labor unions provide benefits to a small segment of the economy and national workforce at the expense of others.Full Answer >
The advantages of niche marketing are focusing on more profitable market segments, ability to establish solid relationships with members of a market segment and increased return on investment for marketing dollars. Disadvantages of niche marketing include increased difficulty in exposing a product to a broad spectrum of consumers, inability to create mass market appeal and limited sales potential. The effectiveness of niche marketing depends on the product.Full Answer >
Advantages of the Association of Southeast Asian Nations include the elimination of tariffs between member states, which has reduced product prices due to increased competition within the market, and possible investment opportunities in the market. Among the disadvantages of ASEAN are the risk of an influx of cheap imports flooding local markets and the existence of poor governance structures in some member countries.Full Answer >
The advantages of trading blocs include easy access to each other's markets, protection of individual markets from cheap imports and increased trade between member countries. Disadvantages of trading blocs include limited trade with producers outside the trading bloc, distortion of world trade and retaliation by other countries.Full Answer >