Real World Views 5.1 Answer 1. Amazon entered the cloud computing industry with its Amazon Web Services (AWS) in 2006 and became a leader in the industry. Even today, Amazon continues to take the lead even though there are several large enterprise players in the cloud computing industry including, Microsoft, HP and Dell. Being a leader, a large-scale provider like Amazon can easily influence the prices of cloud-computing in the long run. Amazon demonstrated that it can influence the prices of cloud computing in February 2010 by reducing prices by 40% on highest usage level when Microsoft entered the cloud computing industry with Microsoft Azure. Right after the launch of Microsoft Azure, Amazon reduced the prices on all Amazon Web Services …show more content…
Yes, devices like iPhones have different prices during various stages of their life cycle. During the introduction and growth stage, the price is at the highest point because of ridiculously high demand and limited supply. During these two stages iPhones are even sold at premium by different sellers. Once the iPhone reach maturity stage, the demand starts to decrease and prices start to fall. During this stage, to compete with different rival smartphone companies Apple starts offering different deals to improve sales. Once an iPhone reaches its final stage of product life cycle, Apple significantly reduces the price to clear the stock and make room for upcoming model. Answer 2. Yes, large companies like Apple can adopt price-skimming policies because these companies are offering exclusive and innovative products. These companies know that during the initial stages the demand for their products is extremely high and they decide to advantage of this by using price skimming policies. Companies like Apple know that fans will buy their product even if the price is on the higher side. Therefore, they introduce the product with a significantly higher price tag and then lower the price when the demand starts reducing. Real World Views …show more content…
Financial blog is the prime example of society protecting customers from issues with information asymmetry. Financial blogs play a central role in reducing the effect of information asymmetry by providing figures and additional information (Saxton & Anker, 2013). Different financial blogs provide communications between investors, analysts and journalists. Saxton and Anker believes that financial blogs from credible individuals help reduce the information asymmetry. Real World Views 8.1 Answer 1. I think that Xu Ji Electric Co Ltd is a good example of a business where Activity Based Costing might be useful because different costs are more accurately allocated under this model. Xu Ji Electric Co Ltd consists of several divisions and ABC helps allocate the cost appropriately to these divisions including costs like after-sales services, warehousing and marketing. The Relay division of Xu Ji Electric Co Ltd operates in a highly competitive and saturated market, where increasing the profits even by a small margin is very difficult (Cimaglobal.com, 2015). Under ABC costing, the Relay Division is able to allocate the cost to appropriate cost centres and it results in lower costs and increased profits. ABC also brought standardization in their working practices and