EC202 SLP Essay Example | Topics and Well Written Essays - 500 words

EC202 SLP - Essay Example If a country has a high GDP, it means it is healthy and has low unemployment, higher wages and hence higher spending power. Hence, Novartis would be more profitable in countries with higher GDPs where it can sell its products at a higher price. ii. Balance of Payments: Since Novartis is in a highly regulated industry (pharmaceuticals) Balance of Payments indicator becomes very important macro-economic indicator for Novartis. If a country is in fiscal deficit, it is likely that the government will induce a spending cut on its healthcare budget, and thereby the government would push Novartis to lower its drugs’ prices. iii. Interest Rates: Novartis being a multi-national pharmaceutical company engages in a number of foreign exchange transactions/flows across the globe. Hence, differences in interest rates would affect the relative worth of currencies in relation to one another (esp. forex changes between euro, CHF and USD). 2. What do these indicators suggest about the current o r future condition of your organization? With regards to the current economic crisis in the US, the macro-economic factors would have a negative effect on the condition of Novartis Pharmaceuticals Corporation. The US Congress recently passed a $38 billion spending cut bill (Reuters) that is anticipated to cut budgets of various government run healthcare and social programs.