Economic Trend: Climate
change is causing more natural disasters
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I believe an opportunity exists because there is
clear data that shows that the rise in global temperatures is due to an
increase in greenhouse gases. This rise in temperature is causing food prices
to increase, more natural disasters, and more. An opportunity here lies in the
creation of renewable energy.
- The prototypical customer is everyday energy
users as well as governments. Renewable energy can be used in cars and homes
which will affect most people around the country.
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I believe this opportunity will be relatively
difficult to exploit because it will take a lot of money up front to fund research and
development and also to compete with already existing companies that produce
renewable energy. I still see a lot of potential in this market.
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My uncle is a big proponent of renewable energy.
He is constantly learning about it, keeping up with all the research, and telling
us all about it. Because of this I understand that even though there are some big names
in renewable energy there is still a lot of room for growth and new entrants. There
is just a high investment barrier to enter.
Economic Trend: Interest
rates rising
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I believe an opportunity exists here because
interest rates are rising because the economy is in a strong place and
unemployment is low. This means that more people have jobs and money to spend
and put back into the economy. This is a great time for people to invest and
start companies.
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The prototypical customer is those who are
looking to invest in new businesses and those who are looking for investors.
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I believe this opportunity will be relatively
easy to pursue as long as people are willing to commit.
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I saw the effects of high interest rates this
past weekend when I was purchasing a new car. Even though I have a great credit
score the interest rate I received for my loan was rather high. But even though
the rising interest rates was not great for me in this situation, others can
capitalize on the opportunity.
Regulatory Trend:
Increase in tariffs
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https://www.cnbc.com/2018/11/26/tariffs-could-cost-american-households-2400-each-in-2019-study.html
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I believe an opportunity exists here for
manufactures to come back to the US. With tariffs getting so high CNBC
estimates that it will cost Americans $915 each in 2019 in raised prices. This is a
huge incentive for companies to bring manufacturing back to the US even though
the prices will not be able to drop as low as they were before the tariffs.
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The prototypical customer is people who can work
in a factory and those who buy the goods. Companies that outsource their manufacturing
are also affected by the rise in tariffs.
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I believe this opportunity will be relatively
difficult because it involves moving a lot of operations and people. Logistics
will be a huge factor in whether companies decide to pursue this opportunity or
not.
- This past summer I worked for Chewy.com an online
pet retailer. While I was there I learned a lot about the operations and
logistics side of manufacturing a product and then getting it to the customer. A
lot of the private label products were manufactured outside of the country and so with the new tariffs their prices will need to be increased if the company wants to receive the same return. If the products were produced in the US there would not be a need to increase prices and the logistics will become easier.
Regulator Trend: New
USMCA trade agreement
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This new trade agreement provides an opportunity
to expand car manufacturing in North America. With requiring 75% of the vehicle
components needing to be made in North America it opens up a need for more car
manufacturers.
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The prototypical customers are those who will be
purchasing the vehicles, those who work in car manufacturing, and car
manufacturers.
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I believe the opportunity will be relatively
easy to exploit because there are already manufacturers here they simply need
to expand. This will also limit the amount of parts bought from outside the US
and customers should be able to get a decent price for a car because there will
be less tariffs imposed on the materials.
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I see this opportunity because I truly feel that
we can bring back jobs to the US in a way that will be beneficial to
manufacturers as well as customers. As more tariffs are being imposed the cost
of outsourcing will increase and it will start to be most cost effective to
make products within the US without outsourcing.
Hi Catherine, I also wrote about climate change as an economic trend. I agree that getting everyone to become more environmentally friendly, from individuals to large businesses and governments, will be economically challenging, but it'll be beneficial in the long-term. As we continue to invest in research and development, use renewable resources and reduce our carbon footprint it will eventually become less expensive.
ReplyDeleteClimate change is something so interesting to study, in my opinion, yet it's still such a controversial topic. I see an opportunity for businesses to take a stand and become more environmentally friendly. What's so unfortunate is how expensive it can be initially to reduce your carbon footprint. I think more extensive research on the national level on ways to be environmentally conscious is a good starting place to potentially creating more regulations for businesses to ensure they act in better interests of the environment.
ReplyDeleteHey Catherine,
ReplyDeleteIt would take a ton of capital to open an all out energy production company. I think there are a lot of smaller opportunities within that sector, though. A company could flourish just on producing one part of a solar panel for instance. You could be a contractor who simply installs them. You did say that you see a lot of potential in the market which I deeply agree with. The biggest obstacle of progress is to break the link between government and big oil, to change legislation that prevents fair competition in the name of low wage job growth like they are pushing in the coal industry.