China recently opened up a free-trade zone in Shanghai, which allows businesses who were originally restricted to trade freely to now trade with lowered barriers to entry. This is a good opportunities for start-up businesses because it provides them with leverage entering the market. Businesses who weren’t able to compete in the market due to tough competitions are now able to join the market with the lowered barriers of entry. In the free-trade zone, these companies will not have to pay high percentage of tax, which allows them to lower their average cost of production. This is beneficial for the economy in Shanghai because with more businesses entering the market, there will be more competitions, which stimulates innovation and productive efficiency. This will also help generate economic growth in Shanghai, which is already one of the fastest growing cities in China.

Foreign businesses will also be able to join the free-trade zone as they originally were restricted from doing this. The introduction of more foreign businesses in the Chinese market will create room for diversity. Businesses will adopt cost leadership strategy, which means lowering the prices to the average price in the market or even lower to compete with the other firms in the market. This is beneficial to the consumers because they have a wider consumer choice and lower prices for goods and services.

Citations: http://articles.latimes.com/2013/sep/30/world/la-fg-china-free-trade-20130930

The US government has shut down a couple of days ago and thousands of workers are made redundant and it has brought numerous companies to halt in the US economy. It happened because the US government could not vote on a new budget plan for the upcoming financial year. The shutdown does not mean that social security, medical payments and the military services will stop, the essential services will still continue. However, thousands of workers who used to work at the Pentagon will be made redundant and put on leave without pay. The US government shutting down will have a couple effects on businesses. First of all, people are being laid off without pay, this means that the national income will decrease, because the worker’s expenditure decreased as they are being made redundant without pay.

A problem stated in the article would be the manufacturing of Blackhawk Helicopters. Blackhawk helicopter’s production line will not be able to continue as there were no government representatives to ‘sign off’ products. US is the world’s leading economy, the military industry is accountable for a huge portion of the countries’ economic growth, as a result of the government shut down, 400,00 staff from the defence department, 40,200 from the commerce department, 12,700 from energy department and 18,500 from the transportation department were let go. US already owes China 16 trillion dollars, the government shutdown will further delay the economic progress. The only question is, how long will the US government be trapped in this turmoil.

Citations:http://www.bbc.co.uk/news/business-24419564

On September 23, 2013. Apple announced that they sold 9 million units of a combination of the new iPhone 5s and 5c during the first 3 days after it is released. Until today, there are over 200 million users in the world today that are currently using the iOS 7 operating systems, which was newly introduced by Apple long side with their new devices. The new iPhone 5s comes in 3 colours and the retail prices for the models are (in US dollars) $199 for 16GB, $299 for 32GB and 399 for the 64GB. On July 13th, it was declared that the market share of Apple in the phone industry was at a staggering 40.4% in the No.1 position followed by Samsung in No.2 with 24.1% of the overall market share. Together the two smart phone power houses are accountable for more than half of the total market share for smart phones. If Samsung disappears from the smart phone market, Apple would be a monopoly leaving the other phone companies such as HTC, Motorola and LG way behind its tracks.

The Samsung S4, which was released in late April this year sold approximately 20 million units around the world within 60 days after the device was released. Apple has already established a firm start by already selling 9 million units in the first 3 days after the iPhone 5S  and 5C was released. It raises the question of whether the Samsung Galaxy smart phones will be able to maintain the current position in the smart phone industry before giving in to the No.1 seller Apple. If Samsung loses their market share to Apple in the upcoming years, it means that Apple will be dominating the smart phone market. If Apple becomes a monopoly in the smart phone industry, it could have both positive and negative impacts for consumers. Some positive impact would be that people around the world would be using the same phone, allowing more compatibility and convenience as iPhones are unable to connect to Samsung phones to transfer photos and files. A negative impact of iPhones becoming a monopoly would be that consumer choices will be limited and if Apple will be able to raise the prices of iPhones and exploit the consumers as the consumers will have no other options.

It will be exciting to see whether Samsung can continue to keep up with Apple’s innovation in the next few years.

Citations:

http://wallstcheatsheet.com/stocks/apples-iphone-5s-edges-out-samsungs-galaxy-s4-in-september.html/2/

http://www.apple.com/pr/library/2013/09/23First-Weekend-iPhone-Sales-Top-Nine-Million-Sets-New-Record.html

http://www.comscore.com/Insights/Press_Releases/2013/9/comScore_Reports_July_2013_U.S._Smartphone_Subscriber_Market_Share