8605-424 Understanding Economics of the Market Place

Unit Overview

8605-424 Understanding Economics of the Market Place is a unit within the ILM Level 4 module that focuses on building the ability of the learners to understand their market, including the target audience, to ensure that they are able to meet the expectations and needs of the market facilitating success within the organisation. Managers must strategically place the organisations in place to meet the needs and expectations of other customers within the market.

This can only be achieved by effectively understanding the market and creating value propositions that are required within the market. The contemporary corporate sector is characterised by significant competition for customers as well as employees, and the management of organisations needs to understand this factor to ensure that they can put in place structures and strategies that focus on maximising the available resources and opportunities to achieve the desired goals of performance.

This unit focuses on creating awareness of such factors that could affect success in managerial responsibilities and facilitate improved performance and productivity within the organisation. The main purpose and aim of this unit are to understand the economics of the market place including competition, demand and supply hence ensuring that the practising or potential middle managers are able to delve into guided strategies and practices. This unit is taught in 10 hours of guided learning and has a credit value of 6 in the completion of the ILM Level 4 module.

Suitability of the Unit

Understanding market dynamics is one of the main responsibilities of the leaders within the organisation. They should put up strategies that help to collect information from the industry level to ensure that they are informed on various factors in the microeconomic environment that affect the performance of the organisation within the current market setting. This process involves understanding the tools that can be used to evaluate the market and putting in place measures of utilising these tools to serve the needs and interests of the organisation.

8605-424 Understanding Economics of the Market Place is a unit that focuses on proving this information to the learners. The unit is designed to mainly address the learning needs of the middle managers who are responsible for overseeing departments, lines or regions hence ensuring that they are able to maximise the competitive ability of the organisations by maximising performance within their areas of responsibility. The unit is also suitable for top managers within the organisation who make strategic decisions.

Understanding the economics of the marketplace helps these individuals to develop objective strategic plans and decisions that not only service the current market but ensure that they are able to forecast future changes in the economy and put up strategies to ensure the organisation remains productive and sustainable amidst the changes. This unit is also important for external consultants within the organisations who guide the activities of building a competitive advantage in the market by ensuring that they understand the context of organisations and tools of analysing the market, which they use to support decision-making in the organisation.

Learning Outcomes

Upon completion of the unit, the learners should be able to:

• Evaluate different factors that influence the prices of goods and services in the industry within the organisation operate using microeconomic principles

• Understand the impact of market conditions on the financial performance of the organisation

• Evaluate the responsiveness and customers and suppliers to the price changes in the market within which the organisation is based

• Understand the barriers to entry and exit for the market within which the organisation is based hence understanding the freedom of entry of new suppliers and exist of the existing ones

• Evaluate the implications of the competitive market environment on the setting of prices within the organisation and overall financial performance.

Key Learning Areas

8605-424 Understanding Economics of the Market Place focuses on effectively evaluating the industry-level economic factors. It involves understanding the external environment of the business and how it impacts the activities and performance of the organisation. The main areas of learning include:

Microeconomic Principles

This area of learning guides the learners to understand the basic principles of microeconomics. The learners are introduced to determinates of supply and demand and preparation f the covers that help to illustrate the price equilibrium. This area also helps the learners to understand the elements of elasticity of demand and its implications within the organisation.

In this area, learners are guided to understand the impact that supply and demand could have on the performance of the organisation financially as well as the ability of the organisation to achieve its goals and objectives. Lastly, they are guided to understanding industrial and consumer markets and the implication that this has on the consumer price and income elasticity on markets that are higher within the supply chain.

Competition

This area of learning helps in guiding the learners to effectively conduct an assessment of the competitiveness of the market within which the organisation exists. Competition is one of the most critical factors affecting performance in terms of the attractiveness of potential employees and market share within the industry. As such, the leaders must show an understanding of models to market competition and their impact on the financial performance of the organisation.

They should also understand factors that create competition, such as the barriers to entry and exit of suppliers to the market, which could create these forms of contention. Within this area of learning, the learners are also guided to different indicators of financial performance and developments, including economic, political, social and technological developments that could impact the market.

Evaluation

Upon completion of this unit, the learners are put through the assessment process to determine the accomplishment of learning objectives and mastery of content that has been taught within the unit. The assessment process involves a written assessment which provides an evaluation of the understanding of the theoretical information that has been taught to the learners within the unit. The practical aspect of the unit is also tested using case studies, simulated exercises and supervised practices that are conducted during the study or after completion of the unit.