1. MACROECONOMIC AND MICROECONOMIC
FACTORS PRESENTATION
By Kristie Soder
Colorado Technical University

2. MACROECONOMIC FACTORS
 GDP
 Interest Rates
 Inflation
 Unemployment
 Currency

3. When comparing two countries, we need to examine the agriculture, cash
surplus/deficit and the percent of auto parts manufactured in this country.
GDP

4. The U.S. interest rates have been impacted by slow growth and
the need to boost the stock market and increase borrowing
(Buttonwood’s notebook, 2013).
INTEREST RATES

5. Inflation is impacted by encouraging borrowing and
creating individual wealth in the stock market
(Buttonwood’s notebook, 2013).
INFLATION

6. Korea’s government regulations on pregnant women and the dwindling labor force will
encourage borrowing. However, the age of the labor force commands higher paying
jobs which mean loss of jobs coming to South Korea. Thus, no jobs means less
growth and less money for the government which means higher interest rates
(Wikipedia, n.d.).
UNEMPLOYMENT

7. The decreased U.S. labor force will lead to less money for the
government and higher interest rates which will make the dollar less
valuable.
CURRENCY

8. MICROECONOMIC FACTORS
 Market Structure
 Price Elasticity
 Porter’s Competitive Strategies
 SWOT
 Auto Manufacturers

9. The market structure is an oligopoly and elasticity of demand is low.
Barriers to entry are high, financial, regulatory and/or patents/legal.
However, a low level of competition is on our side.
MARKET STRUCTURE AND PRICE ELASTICITY

10. SWOT ANALYSIS
Strengths Weaknesses
Leading Nat’l Automotive Supply
Company Capital to move to
U.S. may be weak
Has been
supplying to 3
largest automakers
for over 30 yrs.
Just hit about all
those recalls
Resilency in the
market
Moving to U.S. may
drive up prices
Going to a
government where
the value of the
dollar is worth
more and there are
lower interest rates
Staying in South
Korea may mean
more recalls
Decreased value of
$ and higher interest
rates would be poor
decision to stay in
U.S.

11. SWOT ANAYLSIS
OPPORTUNITIES THREATS
Gain reputation
back
Labor prices might
drive unit prices too
high.
Retain customer
base
Competition might
be able to beat out
Autoedge out
Other countries to
consider
Too little capital to
make move to U.S.
Reputation from
making parts in
South Korea may
haved soiled the
deal.
Interest rates, GDP,
decreased US dollar
value

12. AutoEdge fits into the strategy of differentiation because the customers
are more concerned with the quality of the product versus the price.
PORTER’S COMPETITIVE STRATEGIES

13. COMPANY FACTORS
 Legal
 Social
 Economies of Scale
 Efficiency
 Risk
 Cost of Capital
 Conclusion

14. KORUS FTA is a free trade agreement between the U.S. and
Korea where 80% of the imports to Korea is duty-free
(Office of the United States Trade Representative, n.d.).
LEGAL

15. Economies of scale consider revenue and costs. If costs aren’t used
efficiently, such as, the most cost efficient suppliers and cost efficient
utilities aren’t used, then it is considered a diseconomy.
ECONOMIES OF SCALE AND EFFICIENCY

16. Risk can be assessed with fixed cash ratios, return on assets ratio, etc.
Cost of capital can minimize risk as well. Cost of capital is important for
management to consider because if it does not provide a provide or rate of
return, it will be a loss and could jeopardize the company.
RISK AND COST OF CAPITAL

17. I don’t not think the production should be returned to South Korea, or
the U.S., I believe we need to find another market to send our production. Even
though they believe their sons should take care of old, the laws governing pregnancy
are putting a strain on the labor force. There are not enough young people to pay
lower wages.
CONCLUSION

18. REFERENCES
Buttonwood’s notebook. (2013). The Impact of Low Interest Rates.
Retrieved by http://www.economist.com/blogs/buttonwood/
2013/02/investing
Wikipedia. (n.d.). Demographics of South Korea. Retrieved by
https://en.m.wikipedia.org/wiki/Demographics_of_South_Korea#
Office of the United States Trade Representative. (n.d.). New Opportunities
for U.S. Exporters Under the U.S.-Korea Trade Agreement.
Retrieved by https://ustr.gov/trade-agreements/free-trade
-agreements/korus-fta