How Interest Rates Affect the People Essay Example | Topics and Well Written Essays - 1250 words

How Interest Rates Affect the People - Essay Example An article was presented in the media by the Austin-American Statesman which is a part of the COX Newspapers group. The title of the Article was ‘Nasty surprise may await homeowners with adjustable mortgages’ and it was written by Susan Tompur. Basically, the article discusses how rising interest rates could negatively affect homeowners who have adjustable rate mortgages. If their interest rates rise high enough, they may not be able to make payments on their mortgages which could lead to a situation of foreclosures or for them seeking cheaper housing options. While the article considers the situation in a rather simplified manner, the real connection between interest rates and the housing market is quite complex since the setting of the interest rate is dependant on several things such as the monetary policies of the government and the direction of the economy. On the other hand, the housing market itself depends strongly on supply and demand as well as the relation to mortgage interest rates or housing finance products which are created by banks or offered by other lending associations that deal with the housing market.

Caterpillar Case Study Essay Example | Topics and Well Written Essays - 1000 words

Caterpillar Case Study - Essay Example The major problems that it faces are from the low-cost indigenous products which are aggressively marketing their products especially in places like China and Russia. Low priced locally manufactured products are the main competition that the company faces. The brand equity of its product makes it difficult to lower the prices of its core product line. The company is thus faced with several perspectives which may or may not jeopardize the market position of its popular and core products. To remain in the competition, it can either lower the cost of its main product line permanently or it can bring down the prices temporarily or it can introduce a new LEA (less expensive alternative) with a product that is different or locally manufactured or refurbished and sold under its brand umbrella with caterpillar standard service. The company faces the dilemma of whether the market status of its core product would be cannibalized in the price war or an alternate product line would help meet the competition in a more healthy manner while retaining its market position vis-Ã  -vis its core products. If the company permanently lowers the prices of its main product line, it faces a loss of credibility globally and eventually a huge profit margin which may prove disastrous for the company image and challenge its position as a global leader. Temporarily lowering the prices would have the same consequences as the previous ones. The company is thus left with the option of introducing a new low priced product line to meet the challenge of the local products. The third alternative needs to be investigated deeply because of several hidden problems like cost differentiation between its premium brand and LEA and between LEA and local product and how far down it can be lowered with relation to the local goods.