Question

Exercise 2: Choose the correct term. (please make sure the answer is correct 100%)

1. When the economy is in a recession, the demand increases/decreases

so prices will increase/decrease as a result.

1. 2. If we consider Ikea’s supply chain, the wood companies are considered as raw material providers/distributors.
2. 3. TSC is considered a full service/self-service retailer.

2. What is “e-tailing”? Give one example of an “E-tailer” in Kuwait.

Answer 1

· When the economy is in recession, demand decreases, so prices will decrease as a result.

During a recession, there is decline in economic activities as people spend less money. There is an increase in unemployment, which reduces demand, which in turn reduces prices.

· For Ikea, the wood companies are considered as raw material providers. Ikea sources raw wood, which is then converted into finished products at the company’s production units. They are not distributors as they source raw material and not finished goods.

· TSC is considered as a full service retailer as they have retail stores and employs qualified sales staff which helps the customers during the purchase process.

· E-tailing can be defined as the online selling of goods through the internet. It includes business to consumers (B2C) and business to business (B2B). Xcite is an e-tailer in Kuwait.