Step 1: Answer the following questions about your chosen business

ASD (Australian Strawberry Distributors)

1) Investigate what products your company sells, where they source these products from and any innovation they use to grow/sell/market their product.

My chosen business (ASD- Australian Strawberry Distributors) are known for growing and selling nothing but strawberries, although they do sell a range of different types including Albion, Ruby gem, Cambria and Festival strawberries! Apart from their own farms, ASD sources strawberries from quality assured and accredited growers. Unlike most other growers, ASD has farms located in both Queensland and Victoria in order to produce in-season strawberries all year round!

2) What factors could impact the supply of their goods?

Example of both supply increase and decrease when shown on a supply and demand graph

Supply impactors:

-Profitability of the good

-Number of sellers in the market

-Producer expectations

-Weather and Climate

-Price change (law of supply)

-In and off seasons

Supply decrease examples:

The weather would be a huge factor not only to ASD farmers but nation wide as living in such a dry country will take its toll. As stated by the law of supply also, in this day and age farmers don't get paid great figures so for instance, if there is a drop in the price of strawberries, farmers would be less inclined to produce a large supply as it may not be worth it in the long run. Farmer also have many other things they're require to pay for, from the workers that pick the strawberries to the tractor that prepares the fields for planting, if there isn't an expected profit, the farmers will not supply.

Supply increase examples:

Again, the law of supply states that if prices of strawberries rise, farmers are more likely to produce a large amount in order to make the profit they need to continue to run their farms. Specifically applying to ASD, during the strawberry 'off-season' they will be more inclined or produce as providing in season strawberries all year round would give them the oppotunity to be a primary seller during the winter months.

3) What factors could impact the demand of their goods?

Example of both demand increase and decrease when shown on a supply and demand graph

Demand impactors:

-Consumer tastes and preferences

-Consumer income (price range)

-Consumer expectations

-Quality of competitors goods

-Price of competitors goods

-Number of consumers in the market

Demand decrease examples:

Hugely correlating to the supply, if a drought or any other disaster occurs during farming, the supply will go down and the price will go up. As a result of this, there is going to be a huge drop in demand due to people not wanting to pay the higher prices. Although ASD are unlike others due to their great innovations, other brands are still huge competitors to the market. When another brand comes out with some better looking and tastier strawberries, consumers will rush to the new brand rather than ASD's causing a decrease in their demand, but not necessarily for strawberries as a whole.

Demand increase examples:

As strawberries can not always be the most affordable selection of fruit, when prices drop the demand is likely to increase as the consumers will try to grab the low prices before they're gone. Similar to its own price variability, if a competitors price rises, consumers looking for the best price will often choose the ASD brand again causing a rise in demand.

4) Investigate how your company differentiates (differs) itself from its competitors. Do you think this would increase demand for their product? Why, why not?

By having its farms located in both Queensland and Victoria, they are allowing in-season production of strawberries almost all year round! While most other strawberry distributors provide their best strawberries in the warmer months, this allows ASD to have the primary source of demand while other brands of strawberries aren't likely to get nearly as much attention.

5) Explain situations when the goods that you sold would not be counted towards Australia

What is Australian GDP?

GDP (Gross Domestic Product) calculates the total amount of goods produce by an enconomy as a way of gaining a sense of perception on our economy's health as a country.

When and when isn't ASD strawberries counted towards it?

When a product is distributed to be made as part of another product it is not counted as part of Australia's GDP, this includes things made from my product (ASD strawberries) like: Jam, Boost Juices, macaroons, yoghurt and scented candles. If the product is sold purely as its original form by the company it was made by (ASD branded strawberries) it is counted as part of Australian GDP.

6) All the businesses mentioned export their products overseas into China. What do you think would happen if they could not sell into this market?

As of December 2015, China and Australia signed an agreement of: China Australia Free Trade Agreement (ChAFTA) to mark a strong investment relationship. As China occupies 18.47% of the worlds population as well as being our number one export market, not being able to export to China would really shake up our economy. If their global exports were cancelled, a huge decline in ASD strawberry sales would be evident as the sales from Chinas market would make up the vast majority of profits accumulated by the company.

Step 2: Responding to the prompt

1) Read the article below. Using this article and supported by your answers in part one, respond to the statement.

These days there is a saying, 'When China sneezes, Australia catches a cold.' Describe what you think this statement means.

Australia- a country free of war and conflict, cherished with a healthy economy and production of goods, yet being so closely allied with China's market will come with a cost. Australia and China's strong economic relationship began in late 2015 when the 'China Australia Free Trade Agreement' (ChAFTA) was signed, although the association began in not-so-recent history. While Australias export market profitability is just about as unpredictable as our whether, one thing is for sure and that is that all of China's economical desicion will have variating effect on our nation often with positive or negative outcomes.

Australia and China's ongoing trade correlation is vital to our economy since China's economical decisions can be detrimental to our economical future, hence the term 'when China sneezes, Australia catches a cold'. Occurrences consisting of events in which our exports are rejected by China including a threat for 'strengthened supervision' as of late 2016 due to an outbreak of alleged 'disease-causing-bacteria' being found in Australian dairy exports. This outbreak is just one of many examples that can cause huge impact on our nation due to China's economical decisions. Although our alliance is strong and has been for centuries, in an event where China declines our dairy export production is likely to cause a huge decrease in economical value in our dairy industry as well as loss of jobs and many more life-changing impacts on our everyday society. Being our number one export market and occupying 18.47% of the worlds consumers, a 'butterfly affect' is created beggining with loss of jobs in the dairy industry due to lack of demand, branching all the way down to a price rise in milk at our local supermarkets and causing huge changes in our state of supply and demand. While our decisions as a nation are vital to the economy it is incomparable to our number one export source and superior market when it comes to Australia's international trade.

Despite the term 'when China sneezes, Australia catches a cold' being non other than a metaphorical expression, its meaning is oh-so-true. Our desicions as a nation can make or break our economy although we simply do no the authority as China does to create such catastrophic events amongst our society.

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