Free Managerial Economics Essay Sample

Assignment One


According to NST Business, there are only two companies involved in the sugar refinery business in Malaysia. The first one is Central Sugars Refinery Sdn Bhd (CSR) under Tradewinds (M) Bhd and the other one is MSM Malaysia Holdings Bhd (MSM) under FGV Holdings Bhd.

The article mentions that both MSM and CSR have reaffirmed that there is no monopoly in the sugar refinery business in Malaysia and this claim can be attributed to a number of reasons. First, the structure or composition of the sugar refinery business in the country does not fit with the definition of a monopoly. According to Boyes & Melvin, a monopoly exists when one firm and its product or service offerings dominate the market or industry. In the case of the sugar refinery business, there are two firms controlling the market. NST Business reported that besides local brands, several importers ship in and market different sugar brands and these players create a competitive environment.

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Boyes & Melvin also note that monopolies are characterized by the absence of any restraints such that one firm or a group of firms becomes big enough to control the entire market. In the case of sugar refinery business in Malaysia, the market is not characterized by the absence of any restrictions. NST Business pointed out that the two sugar refiners, MSM and CSR, have to adhere to the Price Control and Anti-Profiteering Act 2011 since sugar is gazette under this legislation. This shows that there are some forms of restrictions in the industry.

Boyes & Melvin further pointed out that another characteristic of a monopoly is that the single firm or group becomes big enough to control virtually the entire market in terms of supplies, assets, goods, commodities, and infrastructure. In terms of this characteristic or aspect, it is prudent to argue that there is no monopoly in the sugar refinery business in the country. NST Business pointed out that besides local brands, several importers ship in and market different sugar brands hence creating a competitive business environment.


The other importers of sugar into Malaysia include SIS, Tate & Lyle, Waitrose, Taikoo, and Billington. The presence of these other importers can benefit the sugar refinery business due to one key reason. NST Business noted that a key first benefit is that they help to create a competitive landscape in the market. In this case, the type of competition that exists is oligopolistic competition. According to Zelga, oligopolistic competition exists when several firms are producing a similar product or a partially differentiated product.

Besides creating a competitive environment, the existence of other players in the sugar import business has other benefits. Zegla suggested that competition promotes diversity, which can in turn affect special features, quality, service or style. In the case of Malaysia, NST Business noted that industry players involved in food and beverage manufacturing import sugar through the NY #11, which is the world’s commodity trading marketplace for raw sugar. Although these manufacturers import through the two main local refiners who buy, import, and refine sugar on their behalf, different food and beverage manufacturers often require different qualities of refined sugar. Therefore, their presence helps to improve diversity and in turn helps to improve quality and service.

The existence of competitors also benefits customers by bringing or forcing prices down. For instance, NST Busines noted that several opportunistic players in the industry are trying to take advantage of the relatively low prices of raw sugar in the world market. These opportunistic entities operate without any of the overhead costs and responsibilities that local refiners in Malaysia have to contend with. Consequently, these players attempt to import cheap sugar from the global market and make profits from the low prices. This simply translates to greater availability of cheaper sugar in the Malaysian market, which translates to lower prices for sugar consumers in the country.


One of the challenges that could be associated with the sugar business with regard to overhead costs like wages, utilities and others is increased or higher cost of doing business. NST Business argued that while the cost associated with doing business has gone up, like electricity and gas tariff, minimum wage, the price cap of refined sugar continues to remain unchanged. Llorens suggested that overhead costs cannot pay for themselves like cost of goods sold and they remain a constant. Overhead costs are mainly associated with the cost of facilitating service delivery, product production, and sales activities. According to Business Encyclopedia, overhead costs have an impact on a company’s income statement. As business expenses rise, profits will certainly decrease. Consequently, overhead costs can have a significant impact not only on gross profit, but also on operating profits and the company’s bottom line.

The other notable challenge associated with the sugar business with regard to overhead costs relates to the firm’s competitive strategy. According to the Business Encyclopedia overhead targets are an essential component of a company’s high-level business strategy. This is the strategy that enables a company to differentiate itself from the existing competition through its business model. Firms that can maintain low overhead costs are able to enjoy higher margins than their competition even while charging similar prices with the competitors. Therefore, low overhead strategies can enable sugar refineries to differentiate themselves in the market by charging lower prices.


One of ways or strategies to address the issue of sugar smugglers is to lower the cost of sugar production. The company can achieve lower production costs through various strategies. First, the company could consider switching the raw material used to produce sugar and choose a raw material that is less costly. For instance, Ford & Lyons noted that the cost of producing sugar from sugar cane is lower than that of beet sugar. Consequently, the company might realize lower production costs simply by switching from one raw material to another and ensure the product gets into the market at a very low price that smugglers don’t see any economic sense in trading smuggled sugar.

The other way the company can achieve lower production costs is by lobbying government to provide subsidies on production costs. The company can lobby government to offer production subsidies in utilities, especially the cost of electricity. As mentioned earlier, the cost of utilities is a significant overhead cost that influences the price of refined sugar. By ensuring the cost of electricity is brought down, the company can reduce its overall overhead costs and hence produce cheaper sugar that can easily push the smugglers’ product out of the market. According to Business encyclopedia, overhead costs can have a significant impact on a firm’s business strategy, which in turn enables a company to differentiate itself from the existing competition. In this case, if the company is able to reduce overhead costs in such a way that the company’s product becomes cheaper that the smugglers’ product, the company’s business strategy can be deemed effective. If the company can maintain low overhead costs it will be able to enjoy higher margins than their competition, in this case the smugglers, even while charging similar prices with the competitors.

Assignment Two


Coronavirus (Covid-19), which is highly infections and results in fatal respiratory illnesses, has created an unprecedented global health crisis. With no cure or vaccine in sight, many countries across the world continue to struggle with soaring infections that have threatened to cripple the global economy and existing healthcare sectors.  The virus, which is easily spread and transmitted, has posed unique challenges to healthcare workers who are at the frontline in the provision of care to infected patients as well as preventing further transmission. There is an urgent need to protect frontline healthcare workers, who are highly exposed to the risk of contracting the virus. Another critical point raised in the article is the growing concern regarding the shortages of one time use personal protective equipment(PPE) that are used to prevent healthcare workers from contracting in the line of duty.  Protecting frontline healthcare workers fighting to combat the virus is an aspect that all healthcare systems should prioritize.  Another critical point raised in the article is the supply chain challenges in the delivery of PPE, which stems from the disruptions caused by the pandemic. The upsurge in the number of infected patients means that more PPEs are required amidst lower the supply chain disruptions caused by the epidemic. Besides, PPEs are not designed for reprocessing; hence the one-time use exacerbates the supply chain and shortage problem.  Another critical point from the article is the need to develop solutions to the current PPE supply chain problem in a bid to protect frontline health workers. Some of the solutions that have been developed in the Republic of Ireland include the improvement of communication channels to enhance the supply chain process, the design and manufacture of PPEs that are tailor-made for Covid-19 and reprocessing with high-level disinfection and sterilization


The current Covid-19 pandemic is unlike any other experienced in recent history. Prevision outbreaks of CoVs have not had far-reaching impacts like the current situation. SARS and MERS did not spread globally and also had lower mortality rates. Covid-19 is estimated to be 30 to 60times more lethal than the annual flu. The devastating potential of the virus is already being felt across the world, with most healthcare systems being overwhelmed by the ever-rising numbers. Most countries and healthcare systems have been compelled to adjust to the rapidly spreading virus, albeit with limited resources that have further been impacted by economic slowdowns. Based on previous pandemics, experts warned that the next pandemic would infect millions across the world.  Like in past pandemics, healthcare workers are highly exposed to the risk of contracting the virus. The World Health Organization has been on the frontline in providing guidelines to curb the spread within healthcare facilities. Protective gears that are often used in such cases include N95 masks, gloves, gowns, and protective eyewear. From previous pandemic outbreaks, most healthcare facilities and systems do not have adequate stockpiles of PPEs to protect frontline healthcare workers. For Covid-19, prevention protocols include lockdowns, social distancing, and rapid contact tracing efforts. The efforts are mainly responsive, where repurposing of existing resources, processes, and infrastructure is carried out towards adaptation to the pandemic situation. In the Republic of Ireland, one of the initial steps was the formation of a multiagency team comprising of professionals in healthcare, science and technology, academia, and crisis management, among others.  One of the priorities the team had is to ensure that the PPE supply chain is maintained according to the rates of infection. The PPE equipment is also expected to meet specific quality standards before distribution to HCW.  A mobile-based information system was also installed to track the use of PPEs against demand and supply.

Ireland, like most countries across the world, has found innovative ways to deal with the pandemic. From a PPE perspective, bespoke manufacturing of PPE equipment has been initiated to curb persistent shortages.   A global shortage in PPEs means that manufacturers cannot meet local and international demand. In Ireland, some of the adaptations include the development of easy to build and inexpensive ventilators and the use of 3D technology in the ventilator assembly process. Due to the nature of Covid-19, the bespoke PPE equipment may the HSE guidelines due to the urgency element. In addition, medical device manufacturers that did not make PPEs before have diverted some of their resources to this process.

Reprocessing of single-use PPEs has been proposed as one of the approaches that could solve the shortage and supply chain problem. However, concerns have been raised regarding the likelihood of further spreading the virus by frontline healthcare workers. Additionally, the dynamics of Covid-19 are still in the development process, and new details are progressively emerging. In this regard, there are no clear guidelines on PPE reprocessing. The fact that PPEs are manufactured for single use has inhibited the availability of information from manufacturers on reprocessing.  Equipment manufacturers have been compelled to carry out research on the efficacy of PPE reprocessing, owing to the universal need to enhance sustainability and also deal with acute shortages challenge.  Regardless of all the positive possibilities, the primary challenge with reprocessing is the safety and functionality after the treatment processes are carried out.  Some medical equipment are designed for preprocessing but have clear sterilization guidelines that are incorporated in the manufacturing process (Mcvoy and Rowan. The pre-cleaning protocols in relation to Covid 19 are yet to be developed.  Proper cleaning guidelines are provided for heat-sensitive endoscopes towards the prevention of healthcare-related infections.  Another concern is that single-use PPE may become less effective when subjected to specific processes such as sterilization using x-rays and gamma rays The process might damage the PPEs to the extent of exposing healthcare workers to the virus. While the reprocessing approach could solve multiple problems brought about by Covid-19, it is important to use a caution approach that is supported by evidence where safety is not compromised. Processes that require validation should also undergo the necessary regulatory approvals. While the need for urgent action is valid, the need to do things differently should be informed by accurate information from relevant stakeholders such as manufactures and medical equipment experts. It is also important that the scope of reprocessing can only be considered for specific PPEs. For instance, the sanitization and sterilization of PPEs, such as face piece respirators, is not recommended.  However, during pandemics such as the current Covid-19 crisis, the CDC has protocols that may allow reuse and prolonged use of some PPEs.  The VH202 sterilization technology has been found to be effective in disinfecting N95 masks. UV-C broad-spectrum light technologies are also being considered for high-level disinfection of PPEs. The technology has previously been used for sanitization and food safety with high success rates. PUV surface disinfection systems that are used in the food industry are also being considered as possible reprocessing contingencies. However, even though some of the preprocessing technologies have been found to be effective in other industries such as the food industry, their current state my not suit PPE reprocessing.  In this regard, all proposed reprocessing approaches should maintain the quality and reliability of the PPES despite the supply chain and shortage challenges.


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