Availability of Resources and New Opportunities, Assessment Example

A company or business’ performance is largely determined by the ability of the business to amass resources required to conduct production of goods and services. Factors of productions, i.e. land, capital and labor, are critical in determining the availability of a company to produce goods and/or services. However, there is an inherent need to further develop new products and even possibly seek new markets for products to ensure a company or business remains relevant and competitive in an ever changing market.

The company’s resources determines its ability to develop new products. This is embodied in the company’ investment in research and development. When resources are limited, companies cannot effectively engage in research and development. A salient example would be Microsoft. When the technological industry shifted from Personal computers to smartphones and tablets, Microsoft was unable to keep up with the change in trends. It attempted to get into the market by investing in the development of the windows phone. However, this was largely unsuccessful. Though the company had financial resources, it lacked the technological resources and skilled labor to effectively get into the market. The company had to purchase the Nokia brand, failing mobile phone producer to get into the market.

Another example is Apple and IBM were continually facing problems surviving in rapidly changing and shifting market. The companies realized considerably high costs of production and could not engage in considerable research and development of new and existing products. In order to overcome this limitation, the two companies decided to merge so as to realize the benefits of economies of scale and the advantages in inter-company synergies to boost innovation. Had the companies remained separate entities, there would be facing considerable challenges in mitigating overall productions costs.