buying power

Examples of buying power in the following topics:

• Consumer Income, Purchasing Power, and Confidence

  • A consumer's buying power represents his or her ability to make purchases.
  • The economy affects buying power.
  • For example, if prices decline, consumers have greater buying power.
  • If the value of the dollar increases relative to foreign currency, consumers have greater buying power.
  • When inflation occurs, consumers have less buying power.

• Present Value and the Time Value of Money

  • The time value of money is the principle that a certain amount of money today has a different buying power (value) than in the future.
  • The time value of money is the principle that a certain amount of money today has a different buying power (value) than the same currency amount of money in the future.

• General Economic Conditions

  • These fluctuations in economic conditions affect supply and demand, consumer buying power, consumer willingness to spend, and the intensity of competitive behavior.
  • Unemployment is low, consumers' buying power is high, and the demand for products is strong.
  • Unemployment rises and consumer buying power declines.
  • Because of reduced buying power, consumers become more cautious, seeking products that are more basic and functional.
  • Unemployment increases, buying power decreases, and all other economic indicators move downward.

• Is wind power right for your business?

  • Some turbines are designed to operate at low wind speeds while others can withstand powerful gusts.
  • Additional considerations that should be researched before buying into wind power include:
  • Some electrical producers do not tolerate competition and may refuse to buy the additional electricity a wind turbine produces or may force all your micro-power to be fed directly into the nation's grid.
  • Years ago a student of mine relayed the story of a village that invested in a huge wind turbine which produced hundreds of kilowatts of power.
  • Unfortunately, the regional power company would not buy the additional electricity and residents discovered that the cost of their purchase would end up taking years to recoup.

• Are solar voltaics right for your business?

  • If your organization can afford to buy several years of its power in advance while awaiting payback, and if your business is situated in a location that receives adequate sunlight then, yes, solar power may be right for business.
  • For example, calculations for concentrated solar power, which uses mirrors to concentrate sunlight onto a fluid-filled container to produce steam that drives a turbine, is cost-equivalent to oil priced at $50 per barrel (before payback) – or as low as $20 per barrel (before payback) when the technology is scaled up.
  • (Seager, Ashley, ‘Alternative Fuels: Now It's a New Game and Clean Energy is No Longer a Dream', The Guardian) For more information about solar power visit www.solarserver.de and click on the English translation icon at the top of the home page.

• Real Versus Nominal Rates

  • A measure of the differences in price levels is Purchasing Power Parity (PPP) .
  • The concept of purchasing power parity allows one to estimate what the exchange rate between two currencies would have to be in order for the exchange to be on par with the purchasing power of the two countries' currencies.
  • On the open market, 2 A's can buy one B.
  • So, in this example, say it take 10 A's to buy a specific basket of goods and 15 Bs to buy that same basket.
  • Purchasing Power Parity evaluates and compares the prices of goods in different countries, such as groceries.

• Making the most of office furnishings, computers and equipment

  • Buy remanufactured, energy-efficient computers, copiers, fax machines, etc. instead of new models whenever possible.
  • (Remember to unplug the power cord when the laptop is not in use. )
  • Most electrical equipment continues to draw power when it's turned off.
  • Enable the power management features on desktop computers (and monitors) to switch off when not in use.
  • Buy used or remanufactured office furniture.

• Types of Buying Decisions

  • Buying decisions are based on buyer behavior.
  • Consumers will often buy on emotion or impulse whereas businesses will buy based on need.
  • Because consumers often buy on emotion, ads can affect the buying decision.
  • Sometimes the type of product will make a difference in the buying decision.
  • This is why companies can influence what type of car a person will buy, but not when they will buy one.

• Putting together a clean production line

  • Overbuying includes: (1) purchasing equipment that will only be used once or twice (in this case, leasing may be a better option), (2) buying machinery that produces or performs far more than what is needed, and (3) taking on board anything that requires more investment in time, input and money (i.e. energy) than what is obtained in return.
  • Before buying large machinery, find out if smaller, more efficient machinery is more economically feasible.
  • Buying a cheaper piece of equipment is not always the bargain it seems.
  • When buying equipment or machinery, remember that there are always two price tags.
  • For example, in 1897, Sakichi Toyoda innovated his company's power-driven weaving looms with a unique device that automatically shut the machines off when a thread broke, thereby preventing the wasting of good thread and the making of defective cloth.

• Nationalization of the News

  • Nationalization of the news refers to the modern phenomenon of the decline of local news networks and the increase in power of national news networks.
  • A few factors are contributing to this trend, including the pressure in generating new and fresh content and the increasing power of conglomerates.
  • The larger networks like ABC News , NBC News, and CBS News are able to afford these technologies and are beginning to buy out the smaller, local networks.
  • ABC News is an example of a large networks "buying out" smaller ones.