Economics is the study of how individuals in the society choose to use resources. Resources include land, time, buildings and individual talent. The study of economics leads to the attainment of knowledge of how to improve our lives. This study also helps us put into practice ways to help improve our status. Economists have their own way of rating the economy based on their thinking commonly known as ‘economic way of thinking’. Economists tend to review ways in which resources affect the lives of individuals. Economists classify these resources to three factors land, capital and labor. There are other ways of reviewing how economists think. These ways are model-building, scarcity and choice, and economic model (Cherunilam, 2010).
NHS is the health care providers in England
This health services remain to be one of the largest publicly funded since its formation in 1948. This is one of the most egalitarian, most efficient, and most comprehensive health providers. This service provider was created as a means of providing health services to all people, despite their wealth status. The central forces resulting from incentives provided by health care interaction competition affect the price, quality and quantity of health services. There are various market environments in which health care needs to operate. Physical and hospital service provide a higher GDP to the economy in relation to other sectors. Oligopoly is a form of the market where the industry or market is dominated by a miniature number of sellers. If the providers of health services like NHS are few, this makes it possible for consumers to pay a considerable payment. This is attributed to the fact that there is less competition. If health providers are less, then the prices people pay is high and expensive (Harrison & Dixon, 2000).
Monopoly is the market where there is the existence of a specific enterprise or person who supplies or offers the services. This method of market type has a considerable effect to various providers like health care or NHS. This implies that they can ask for any amount of charges while offering services, which fail to reach the expectation of the people. These markets face no competition, thus can play with their prices the way they want as they are the only player in the market. Duopoly is a type of oligopoly where there exist only two producers in an existing market. This type of market makes it possible for health services like NHS to increase their price assuming the other will not increase. This stipulates that they can charge and provide services at their convenience as they have utmost power over the market (Worthington & Britton, 2006).
Perfect competition is the market where the participants have less power to control the market share and price. Admittedly, this market makes it possible for health services to provide better services at the same prices as the other competitors. Monopolistic competition is where the size of the company does not affect the price of the products. This means that in this kind of market, health services like NHS distinguish themselves by the kind of services they provide. This leads to a company gaining advantage over the other in terms of price, and services (Palmer & Hartley, 2006).
In any market, supply and demand determines the prices of services and products
The increase of demand causes price rise while the increase in supply reduces prices of services. Health providers like NHS ensures that the prices of services never rise to an instance of oppressing the public, despite the rise in demand or supply. This is because health services are among the major services, which price rises, should be regulated. To enhance maximum sales, a business has to understand the entire factors that shape consumer buying. Businesses have to understand these factors that are: psychological, personal, social and cultural. This implies that since NHS provides better services, people prefer to receive services from them, despite their prices. This is because if they provide better services, then customers are assured of better health (Cherunilam, 2010).
Health providers like NHS needs to be very articulate in the prices they set to the people. This means that they should ensure that their prices should be dependent on the services provided. If health providers set high prices and they offer inadequate services, then they face losses. Price decision regarding sensitive services like health care needs consideration. Customers vary the price and output achieved after provision of a service. If health providers give inadequate services and outcomes, then people may refuse to access their services (Harrison & Dixon, 2000).
Lifestyle of different people is dependent on their culture
Culture poses as an obstacle to attaining of better health in different societies. These two aspects have a high impact on health and many researchers are using them to ensure they get a solution. Many have been identified to ignore culture to obtain health services. This aspect has been classified as structural factor, which is gaining momentum. Culture limits various health services which are efficient in better health. The social status of a customer also limits the attaining of better services. The fact that people in the UK have overlooked culture, this makes it possible for health providers to provide same services to all people from different religions and culture. This makes it possible for NHS to provide better and same services to all the people (Harrison & Dixon, 2000).
The PEST analysis is widely used as strategic management components. This analysis stipulates that a company needs to clearly undertake strategic management plans to ensure that these macro environmental factors are put into consideration. This analysis makes it possible for a business to understand business position, directions and potential for operations, and market decline or growth. Political factors stipulate the force by which the government intervenes. The government of UK has put a lot of emphasis on health an aspect that has made NHS grow. This is determined by factors like labor law, tax policy, political stability, trade restrictions, tariffs, and environmental law. Economic factors involve interest rates, inflation rates, economic growth, and exchange rates (Cherunilam, 2010).
Social factors put into consideration health consciousness, safety emphasis, career attitude, age distribution, and growth rate. These factors affect the company’s operations and demand of products. Technological factors consider aspects like technological change rate, R&D activity, technology incentives, and automation. These factors can lead to outsourcing, and entry barriers. Legal factors are like consumer law, employment law, discrimination law, antitrust law, and law of health and safety. This factor plays a part in the operation of a company, demand, and its cost. Environmental factors constitute environmental and ecological aspects like climate change, climate, and weather. These factors affect industries like insurance, farming, and tourism (Cherunilam, 2010).
International trade is very essential to a company and also a country
In case two countries went into trade, then this implies that various factors will change. This is the aspect that will happen when UK enter into trade with other countries. This will lead to harmonization of the health sector. This means that it would attract investors who will come up with measures to increase this sector. There are various opportunities that UK NHS will gain from international trade. This includes market penetration. This implies that liberalization of the health sector will make investors come with a greater marketing mix, which will see the company gaining a larger market share. The other opportunity that this health provider stands to gain is product development. This means that investors will come with ways of introducing better methods to provide services (Harrison & Dixon, 2000).
Global factors play a huge part in the services provided by NHS. Some of these factors include foreign direct investment. This factor is going to bring a lot of changes to the economy. This factor will have a greater effect towards competition. This will lead to more competition as investors will want to make the sector more attractive leading. This will then lead to the growth of the sector, thus encouraging employment. The aspect of investors playing in this field will ensure that employment opportunities are created. The education sector will also increase and grow as investors will ensure that those participating in NHS are well educated. The economy and finance of the region will grow as many investors will put much to ensure better developments. This means that the employment, competition and education growth will lead to better finances and a growth in the economy (Worthington & Britton, 2006).
The environment will also face changes as better ways of protecting it will be implemented. This is in comparison to industrial growth where there are a few factors, which are never considered. The force of investment will ensure that the field of science and technology grows considerably well. This means that patients will receive treatment with the use of advanced and technologically stable machines. The movement of labor regionally will be enhanced as a result of growth in this region. This is determined by values like prices paid to service providers. The skills of the workforce will also increase since it is a requirement to the provision of services. These global factors will also lead to the growth in exchange rates. This will make the country’s exchange rate grow and be strong. This plays part in the growth of the currency (Palmer & Hartley, 2006).
The policies set by the European Union have a considerable effect towards the provision of health services in UK. This means that the strategies put in place will be enhanced to meet the demands set by the policies. This will also affect the decision making of this sector. Critical decisions are required for aspects like leadership with a motive of offering the best. These policies will also lead to review of the working time of service providers. This will ensure that better time is allocated to enhance their efficiency in working (Harrison & Dixon, 2000).
The study of all forces and factors that affect the environment and the economy are a very important aspect. This makes it possible for sectors like health, which is very essential to face development. Implementation of laws that focus on health sector ensures that better services are provided to all at fair prices. This is an aspect that will lead to the growth of the economy, as well as the country.
- Cherunilam, F. (2010). Business environment. Mumbai [India: Himalaya Pub. House.
- Gillespie, A. (2013). Business economics.
- Harrison, A., & Dixon, J. (2000). The NHS. London: King's Fund.
- Palmer, A., & Hartley, B. (2006). The business environment. Maidenhead: McGraw-Hill Education.
- Worthington, I., & Britton, C. (2006). The business environment. Harlow: Financial Times Prentice Hall.