What is an example of derived demand in the automobile industry?

  

ORIGINAL
QUESTION:
Why is the concept of derived demand so important for
companies selling products and services to other organizations? What is an
example where an industrial company has benefited from changes in end-consumer
demand?
STUDENT
1 RESPONSE:
Derived demand increasing or decreasing consumer
demand for a specific product. Demand or lack of demand for specific products
can either create or reduce demand for product related to the specific product.
For businesses, derived demand creates a right to left flowing chain, which
starts with consumer demand. Derived demand value chains and the ripple effect
underscore the importance of business to business relationships.
The automobile industry is affected by the
end-consumer demand. It is the second biggest, a company gets almost fifty
percent of its revenues from automotive companies that deals with steel. Steel
is the backbone of the United States; it plays a huge part of the economy and
give people job.
References:
Lohrey,J. (2015). An Example of Derived Demand |
Chron.com. Retrieved from http://smallbusiness.chron.com/example-derived-demand-80611.html
O’Hara,M. (2014, December 18). Important End
Consumers Of Steel – Market Realist. Retrieved from http://marketrealist.com/2014/12/overview-key-end-consumers-steel/
STUDENT
2 RESPONSE:
Hello Class,
The concept of derived demand is so important for companies
because companies has a chance to get their products and services recognized
through big named companies. Also, derived demand for companies selling
products and services to other companies allows each company to gain revenue
off a particular companies so that consumers will have a high demand for their
products and services. Sometimes, when companies sell their products and
services to other companies, they make a good enough percentage or value of the
products and services that are sold. For example, in the toy business or toy
manufacturing industry, companies are always making new toys such as action
figures and dolls. These kinds of toys are always being manufactured and sold
to either small businesses or big named businesses such as Toys R US, Big Lots,
Sam’s Club, Disney Store, Ollie’s, Wal-Mart and Target etc. These few companies
I named have a success in some ways selling and purchasing toys from different
toy manufacturing companies that are better withdesigning and creating
toys that keeps children wanting more each year. There are some toys that no
longer exist becauseof the end-consumer demand. For example, some action
figures seems to evolve more and more over time. Marvel, DC Comics, Ninja
Turtles, Barbie, Cabbage Patch kids, America doll, Monster High,
FrozenDisney characters,and Legoswill never seem to get
old because children of all generation love these toys for their unique
designs, features and building, accessories that comes with each toy. I believe
that Toy industry will always benefit from changes in the end consumer demand
because children will always find new and better toys to enjoy.

Introduction:

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The concept of derived demand plays a crucial role in the business world, especially for companies selling products and services to other organizations. It refers to the demand for goods and services that arises from the demand for another product or service. Derived demand is a significant factor that affects many industries and their supply chains. It creates a ripple effect and underscores the importance of business-to-business relationships. In this article, we will explore why derived demand is important for companies and how it impacts the manufacturing industry.

Description:

Derived demand is an economic phenomenon that can be observed in many industries, including the automobile and toy manufacturing industry. In the automobile industry, for instance, the demand for steel, a raw material used to make cars, comes from the demand for automobiles. The steel manufacturers, in turn, depend on the automobile manufacturers to buy their products. Changes in the end-consumer demand for cars will have a significant impact on the entire supply chain, from steel manufacturers to automobile manufacturers. Similarly, in the toy manufacturing industry, companies producing toys, such as action figures and dolls, depend on the demand from retail giants like Wal-Mart, Target, and others. Companies capable of designing and creating unique toys that cater to children’s interests and needs could benefit from changes in end-consumer demand. As the markets evolve, businesses need to adapt their supply chains to meet the changing demands of their end-users. In conclusion, derived demand is a crucial factor for businesses aiming to thrive and build long-term partnerships with other organizations.

Objectives: To understand the concept of derived demand and its implications for businesses selling products and services to other organizations. To analyze how changes in end-consumer demand can impact industrial companies.

Learning Outcomes:
1. Define the concept of derived demand and explain its importance for businesses selling products and services to other organizations.
2. Describe the value chains and ripple effect created by derived demand and their implications for B2B relationships.
3. Analyze the impact of end-consumer demand on the automotive industry and the steel market.
4. Identify an example of how an industrial company has benefited from changes in end-consumer demand, using the toy industry as a case study.
5. Evaluate the reasons why some toys become successful and others become obsolete due to changes in end-consumer demand.

Solution 1: The Importance of Derived Demand for Companies Selling Products and Services
Derived demand is crucial to businesses that sell products and services to other organizations. It leads to a right to left flowing chain that starts with consumer demand and creates value chains and ripple effects that underscore business to business relationships. A notable example is the automobile industry, where the end-consumer demand for cars has an impact on the steel industry. Almost fifty percent of the revenues for a steel company come from automotive companies. Steel is the backbone of the U.S. economy and provides employment opportunities for people.

Solution 2: How Industrial Companies Benefit from Changes in End-Consumer Demand
Industrial companies benefit from changes in end-consumer demand, particularly in the toy industry, where companies create new toys such as action figures and dolls that are sold to small and big-name businesses like Toys R Us, Target, Walmart, and Disney Store. Companies that manufacture these toys get recognized through big named companies, and they gain revenue off particular companies. Toy manufacturers design and create toys that keep children wanting more each year. Certain toys no longer exist because of changes in end-consumer demand, but the popularity of toys like Marvel, DC Comics, Ninja Turtles, Barbie, Cabbage Patch kids, American Girl dolls, Monster High, Frozen Disney characters, and Legos will never get old because of their unique designs, features, building, and accessories. The toy industry will always benefit from changes in the end-consumer demand because children will always find new and better toys to enjoy.

Suggested Resources/Books:
1. Economics for Business by John Sloman and Kevin Hinde
2. Microeconomics: Theory and Applications with Calculus by Jeffrey M. Perloff
3. Essentials of Managerial Economics by Samuelson & Mark

Similar Asked Questions:
1. How does derived demand impact the supply chain of a company?
2. What is the relationship between consumer demand and derived demand for industrial goods?
3. How does derived demand affect the pricing strategy of a company?
4. What are some examples of industries that heavily rely on derived demand?
5. Can a company’s revenue be greatly affected by changes in end-consumer demand?ORIGINAL
QUESTION:
Why is the concept of derived demand so important for
companies selling products and services to other organizations? What is an
example where an industrial company has benefited from changes in end-consumer
demand?
STUDENT
1 RESPONSE:
Derived demand increasing or decreasing consumer
demand for a specific product. Demand or lack of demand for specific products
can either create or reduce demand for product related to the specific product.
For businesses, derived demand creates a right to left flowing chain, which
starts with consumer demand. Derived demand value chains and the ripple effect
underscore the importance of business to business relationships.
The automobile industry is affected by the
end-consumer demand. It is the second biggest, a company gets almost fifty
percent of its revenues from automotive companies that deals with steel. Steel
is the backbone of the United States; it plays a huge part of the economy and
give people job.
References:
Lohrey,J. (2015). An Example of Derived Demand |
Chron.com. Retrieved from http://smallbusiness.chron.com/example-derived-demand-80611.html
O’Hara,M. (2014, December 18). Important End
Consumers Of Steel – Market Realist. Retrieved from http://marketrealist.com/2014/12/overview-key-end-consumers-steel/
STUDENT
2 RESPONSE:
Hello Class,
The concept of derived demand is so important for companies
because companies has a chance to get their products and services recognized
through big named companies. Also, derived demand for companies selling
products and services to other companies allows each company to gain revenue
off a particular companies so that consumers will have a high demand for their
products and services. Sometimes, when companies sell their products and
services to other companies, they make a good enough percentage or value of the
products and services that are sold. For example, in the toy business or toy
manufacturing industry, companies are always making new toys such as action
figures and dolls. These kinds of toys are always being manufactured and sold
to either small businesses or big named businesses such as Toys R US, Big Lots,
Sam’s Club, Disney Store, Ollie’s, Wal-Mart and Target etc. These few companies
I named have a success in some ways selling and purchasing toys from different
toy manufacturing companies that are better withdesigning and creating
toys that keeps children wanting more each year. There are some toys that no
longer exist becauseof the end-consumer demand. For example, some action
figures seems to evolve more and more over time. Marvel, DC Comics, Ninja
Turtles, Barbie, Cabbage Patch kids, America doll, Monster High,
FrozenDisney characters,and Legoswill never seem to get
old because children of all generation love these toys for their unique
designs, features and building, accessories that comes with each toy. I believe
that Toy industry will always benefit from changes in the end consumer demand
because children will always find new and better toys to enjoy.

Introduction:

The concept of derived demand plays a crucial role in the business world, especially for companies selling products and services to other organizations. It refers to the demand for goods and services that arises from the demand for another product or service. Derived demand is a significant factor that affects many industries and their supply chains. It creates a ripple effect and underscores the importance of business-to-business relationships. In this article, we will explore why derived demand is important for companies and how it impacts the manufacturing industry.

Description:

Derived demand is an economic phenomenon that can be observed in many industries, including the automobile and toy manufacturing industry. In the automobile industry, for instance, the demand for steel, a raw material used to make cars, comes from the demand for automobiles. The steel manufacturers, in turn, depend on the automobile manufacturers to buy their products. Changes in the end-consumer demand for cars will have a significant impact on the entire supply chain, from steel manufacturers to automobile manufacturers. Similarly, in the toy manufacturing industry, companies producing toys, such as action figures and dolls, depend on the demand from retail giants like Wal-Mart, Target, and others. Companies capable of designing and creating unique toys that cater to children’s interests and needs could benefit from changes in end-consumer demand. As the markets evolve, businesses need to adapt their supply chains to meet the changing demands of their end-users. In conclusion, derived demand is a crucial factor for businesses aiming to thrive and build long-term partnerships with other organizations.

Objectives: To understand the concept of derived demand and its implications for businesses selling products and services to other organizations. To analyze how changes in end-consumer demand can impact industrial companies.

Learning Outcomes:
1. Define the concept of derived demand and explain its importance for businesses selling products and services to other organizations.
2. Describe the value chains and ripple effect created by derived demand and their implications for B2B relationships.
3. Analyze the impact of end-consumer demand on the automotive industry and the steel market.
4. Identify an example of how an industrial company has benefited from changes in end-consumer demand, using the toy industry as a case study.
5. Evaluate the reasons why some toys become successful and others become obsolete due to changes in end-consumer demand.

Solution 1: The Importance of Derived Demand for Companies Selling Products and Services
Derived demand is crucial to businesses that sell products and services to other organizations. It leads to a right to left flowing chain that starts with consumer demand and creates value chains and ripple effects that underscore business to business relationships. A notable example is the automobile industry, where the end-consumer demand for cars has an impact on the steel industry. Almost fifty percent of the revenues for a steel company come from automotive companies. Steel is the backbone of the U.S. economy and provides employment opportunities for people.

Solution 2: How Industrial Companies Benefit from Changes in End-Consumer Demand
Industrial companies benefit from changes in end-consumer demand, particularly in the toy industry, where companies create new toys such as action figures and dolls that are sold to small and big-name businesses like Toys R Us, Target, Walmart, and Disney Store. Companies that manufacture these toys get recognized through big named companies, and they gain revenue off particular companies. Toy manufacturers design and create toys that keep children wanting more each year. Certain toys no longer exist because of changes in end-consumer demand, but the popularity of toys like Marvel, DC Comics, Ninja Turtles, Barbie, Cabbage Patch kids, American Girl dolls, Monster High, Frozen Disney characters, and Legos will never get old because of their unique designs, features, building, and accessories. The toy industry will always benefit from changes in the end-consumer demand because children will always find new and better toys to enjoy.

Suggested Resources/Books:
1. Economics for Business by John Sloman and Kevin Hinde
2. Microeconomics: Theory and Applications with Calculus by Jeffrey M. Perloff
3. Essentials of Managerial Economics by Samuelson & Mark

Similar Asked Questions:
1. How does derived demand impact the supply chain of a company?
2. What is the relationship between consumer demand and derived demand for industrial goods?
3. How does derived demand affect the pricing strategy of a company?
4. What are some examples of industries that heavily rely on derived demand?
5. Can a company’s revenue be greatly affected by changes in end-consumer demand?

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