Free market economy system: In this economy system the resources are allocated on the basis of the price mechanism. Organizations are free or self-directed to use the resources of the nation as per the need and demand in the market. There is no role of government in the allocation of resources in economic system. Denny Toh deals in the business of medical services in UK and wants to expand its market in China and for this it is important for them to consider that which type of economic system is followed in China. Both in UK and China for the allocation of resources related to medical, government of these countries does not follow the free economic market system.
Command economic system: Command economic system is that system in which there is only role of government for allocation of resources to the organization. In China the government follows the command economic system and Denny Toh has to take permission from government for its medical resources. All the decision related to allocation of resources and productions are based in accordance with the rules and regulations of government. In UK allocation of medical resources are done in accordance with the permission of government or it can be said that UK government follows the command economic system for allocation of medical resources.
Mixed economy system: In this system, economies follows both free market and command economic system. In UK, mixed economic system is followed where some of the resources are allocated by the government organizations of the country and some are allocated as per the private organizations. Denny Toh will not find mixed economic system in China.
In mixed market economic system such as in UK the fiscal and monetary does not pay any greater impact on the business of organizations such as Denny Toh. The reason is that in UK there is mixed economic system and government does not play any major role in allocation of resources. Impact of these policies does not effect on all the business organizations of UK.
In China where the country follows command economic system, both monetary and fiscal policy make impact on the business organizations of entire country. Policies of central bank and government of country makes direct impact on the business of the companies or on all the industry sectors of the country.
Government of UK pays major emphasis on its international trade policies which are for UK business organizations. The main reason behind greater importance of the international trade is that it promotes the activities of exports and imports and also the exchange of foreign currency in the country. Denny Toh has to shape its business activities in accordance with the international trade activities of government as they are dealing in medical sector of UK.
• It assists the organizations to enhance its competitiveness in domestic as well as in international market. Expansion of Denny Toh in international market will also increase its share in medical service sector. • International trade also has significance to Denny Toh that expansion of business in global market will increase its sales revenue and profitability. Export of UK government in context to medical services will also increase.
• Another importance of international trade for UK business organization is that if the condition of the medical service sector in domestic region is saturate, than the organizations has greater opportunity to operate their business in international market. • Organizations dealing in UK medical service sector also have the advantage to utilize its competitive capabilities and unique features in global level market. This will also minimize their dependence in UK and enhance their focus towards the other geographical market of medical services.
Expansion of business with international trade also some impact of global factors on the medical services offered by the UK companies. Political factors such as rules and regulations of government of foreign country will impact on the business of the company. Another factor is the economic condition of nations such as inflation, recession etc. makes impact on the sales and profitability of the organizations.
But their also some positive impact of global factors for the organizations deals in medical services, such as companies can take advantage of technology which help them enhance its services or to improve them. Policies of government regarding taxation and allocation of resources can also make the positive impact if there are minimum taxes, duties are levied by the government.