Signature Assignment: Challenges of Expansion to a Foreign Location

 

Purpose of Assignment 

This week students will review and revise their Week 3 Research Analysis for Business Signature Assignment based on economic analysis and the feedback provided by their facilitator. Students will also expand their Week 3 analyses to evaluate the challenges of expanding their chosen company’s production to a foreign market.

About Your Signature Assignment

This signature assignment is designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad statements that describe what students should know and be able to do upon completion of their degree. The signature assignments might be graded with an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and used for program improvements. 

Assignment Steps 

Resources: Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products. 

Revise your Week 3 assignment, Research Analysis for Business, using the feedback provided by your facilitator. This Week 6 report should only include one conclusion, so you will need to rewrite the conclusion you included in your Week 3 assignment, Research Analysis for Business. 

Select a foreign market in which to expand your chosen product. If you wish, you may use one of the countries your team analyzed in their Week 5 Comparative and Absolute Advantage Assignment. 

Prepare a minimum1,750-word report addressing the points listed below. The use of tables and/or charts to display economic data over the time period discussed is highly encouraged, you may submit any economic data in Microsoft® Excel® format in a separate file. You may use the U.S. Department of Labor’s Bureau of Labor Statistics (BLS), U.S. Dept. of Commerce’s Bureau of Economic Analysis (BEA), the Federal Reserve of St. Louis’s FRED data, the CIA World Fact Book, World Bank data, and World Trade Organization, or other appropriate sources you might find on the Internet or in the University Library. The new sections of your report should:

• Evaluate current global economic conditions and their effects on macroeconomic indicators in your selected country. Provide forecasts for population growth, gross domestic product (GDP) growth, GDP per capita growth, export growth, and sales growth.
• Evaluate any competitors’ existing production in the chosen country.
• Assess sales forecasts in the selected country by using the Federal Reserve of St. Louis’s FRED data, the CIA World Fact Book, World Bank data, World Trade Organization, or other appropriate sources you might find on the Internet or in the University Library.
• Categorize the type of economy that exists in your selected country as closed, mixed, or market.  What is the difference between these types of economies and how might this affect your expansion?
• Assess how your chosen country’s current credit market conditions, especially interest rates and the availability of financing, affect demand for your product or service and your planning or operating decision for your production in that country.
• Analyze the role of the selected country’s central bank on that country’s economy.
• Compare the availability, education, and job skills of the work force in the selected country. Discuss any additional challenges of international production, such as political stability, availability of government financing or other incentives, threat of capital controls, and exchange rate risks.
• Explain any additional supply chain challenges you anticipate if attempting to make your product in your chosen country and selling the product in other countries.
• Based on the data gathered and analysis performed for this report write a conclusion in which you:

  Create business strategies, including price and non-price strategies, based on your market structure to ensure the market share and potential market expansions and explore global opportunities for your business in a dynamic business environment and provide recommendations.
  Develop a recommendation for how the firm can manage its future production by synthesizing the macroeconomic and microeconomic data presented.
  Propose how the firm’s position within the market and among its competitors will allow it to take your recommended action.
  Recommend strategies for the firm to sustain its success going forward by evaluating the findings from demand trends, price elasticity, current stage of the business cycle, and government.
  Recommend any comparative advantages your company will have over competitors currently operating in that country, and defend your position, either for or against, expanding your company’s production into your chosen country based on your research. 

Integrate with the Week 3 Individual Assignment, and incorporate corrections and suggestions from the instructor’s feedback. The final report should be a minimum of 2,800 words. 

Cite a minimum of three peer reviewed sources not including the textbook. 

Include all peer-reviewed references and government economic data sources/references from Week 3. 

Format your assignment consistent with APA guidelines.

Lourde Owens

Eco/561

Dec. 11, 2017

Mark Erenburg

Apple

Apple is an electronics publicly traded company in the USA, it was ranked the most profitable company in the USA in 2012 with Steve Jobs as the CEO.

Apple is an innovative company that has revolutionized the electronics industry that ranges from both hardware and software. The products are i pods, i phones and I pads. The company’s main strategy is innovation and differentiation which has been at the companies’ core drive in achieving its success. In the area of technology and innovation, the companies’ environmental analysis has strategies that are affected by both opportunities and threats which are paramount to the firms’ survival in the market.

Apple’s external environment

It can be divided into macroeconomic factors such as the need for lower costs products to satisfy the consumer’s needs, technological, demographic and social factors. The Socio-cultural effects include the need to create portable devices that have a perfect design of the products that are easy to use. The forces that shape the industry are the bargaining power of buyers and the suppliers. The threat of new entrants, substitute products or services, and competition, in the technology industry, the bargaining power is high because consumers always have alternative choices at no cost.

The supplier’s bargaining power affect a firm’s strategy that has affected the way Apple viewed its suppliers. The strategies that Apple implemented reduced suppliers’ bargaining power and helped limit the cost of its products when faced with economic turmoil and increasingly demand of consumers.

The market structure of the apple company

It is a competitive one that’s dominated by huge companies such as IBM, HP, and Del. The market is a perfectly competitive. This implies that:

· There is perfect knowledge and no information failure.  The Knowledge is freely available to all participants in the market hence minimal risk taking and entrepreneur roles are few.

Apple Company in its market strategic focus on differentiation of its products, Jobs the CEO has worked towards diversifying the companies’ products .The company operates in a global market that has allowed it to capture a larger market share in different countries that have emerging trends of technological innovations.

While the industry growth is experiencing tough completion, product differentiation has enabled Apple Company to expand and focus more on the product differentiation and product design Apple has dominated the global profit share of the mobile phones, with 65% of the profits in 2017.  Counterpoint reports indicate that during summer of 2016, Apple was selling over 50% of the global premium smartphones and launching quality products too, with high sales and marketing capabilities

Barriers to entry in this market

The barrier to entry in the market is what makes the Apple Company so dominant and that In order to successfully compete against Apple, a company must have a better customer loyalty compared to apple. The Apple Company has a very big consumer base, and most people own their products due to the level of utility derived from the products, they keep on purchasing their products.

The barriers include:

· Cost for changing the consumers preferences.

Apple has all their products together by use of applications. They include iTunes for music and i Cloud for storage of data. These gives the competitors of apple lower chances of consumers purchasing their products. This kind of competition makes other companies to convince customers that their products are cheap alternatives

· High competition in the industry

Since Apple has already secured a competitive advantage over others in the market, it can use their pricing strategies to keep other competitors from competing favorably in the market.

Current stage of the business cycle

The apple company is currently performing well and maintaining its standards in the growth stages. Apple’s products have not yet reached the maturity stage because of the constant innovations that the company has embraced, improving its technology and the products that they offer. Just to explain how apple has managed to sustain itslf in the growth stage, apple came up with multiple products, or existing products with new features .an example is the newly expected I pad mini and the IMac.

The Real gross domestic product (GDP)

Apple Company contributes to 0.5% of the USA GDP, which amounts to 0.15% of the global GDP; the success of apple implies that the company is much richer in the countries as compared to the other companies, meaning that the company performs well not only in the USA but also in the global arena. The diverse nature of the company has seen it create employment out and in of the country, hence reducing the level of unemployment.

The decision making model that can be adopted by Apple Company

The analysis and decision-making model

Facts

· During the economic boom the economy is stable and funds are available for people to invest in various projects, however the period of recession is characterized by the low incomes and funds therefore become less available for investments leading to a corresponding low profits and losses in investments

· Every investments involves risk taking and therefore the uncertainties caused by the economic fluctuations can lead to either making of profits or losses. When the prices of commodities go up, the demand for the same products will reduce

· Reduction of and laying off of workers is a business strategy that is important in terms of cost reduction in order to prevent the firm from continually recording losses. The process of strategy formulation is

· Competitor analysis is the business strategy used by Charles in order to identify the competitor’ s strengths and weaknesses

The alternative courses of action

Employers

Employees

Insurance

Government

Customers

Diversification

Acquisition of new customers and market base

Gain alternative experiences from new investments

Acquisition of premiums through risk protection

Increase its tax base

Variety of products to purchase

Divestment strategy

Reduction in income

Loss of jobs

Loss of clients

Reduction of investments hence low incomes

Reduction in the purchasing power

Joint ventures

Spread of risk

Acquisition of new skills

Reduction in premiums

Reduction of tax base

Acquisition of quality products

The beneficial causes of action that apple can undertake and their effects

· The spread of risk along a large base by the investors

· Acquisition of skills by the employees through the joint ventures where they are able to share ideas and skills

· Acquisition of a broader range of products by the customers

· Increase in the tax base for the government in order to provide services to the citizens

Conflict of interest

· The most suitable strategy that can be adopted in this case is diversification since it will impact positively on most of the stakeholder’s interests.

References
Yoffie, D. B. (2012, Aug 14). Apple Inc. in 2012. Harvard Business Review , 1-15.
Linden, G., Kraemer, K. L., & Dedrick, J. (2009). Who captures value in a global innovation network?: the case of Apple’s iPod. Communications of the ACM, 52(3), 140-144.

Yoffie, D. B., Alcacer, J., & Kim, R. (2012). HTC Corp. in 2012.

Lescop, D., & Lescop, E. (2016). The Apple Twist.

Individual Assignment: Research Analysis for Business

Week 3 Grading Guide

Content –

7

Possible Points

Met

Partially Met

Not Met

Comments:

Identified the market structure student’s chosen firm operates in, analyzed student’s chosen firm’s current market share, and identified the firm’s local/global competitors. Analyzed the barriers to entry in this market to illustrate the potential for new competition and its impact on firm’s future in the market.

1

Mkt structure, Mkt share, Local/global competitors, Barriers to entry/Relation to potential competition & impact on firm’s future in mkt.

[Yes]

Identified and explained trends in current macroeconomic indicators for last three years including:

· Current stage of the business cycle.

· Real gross domestic product (GDP).

· Inflation as measured by the consumer price index (CPI).

· Unemployment rate.

· Federal funds rate.

· Current rate for borrowing funds such as the so-called “prime rate.”

1

3 yr trends –

-Current stage in bus cycle

-Real GDP

-Inflation (CPI)

-UE rate

-FFR

-Current rates for borrowing funds

[Yes]

Evaluated trends in demand over last three years and explained their impact on the industry and the firm. Included quarterly (last two quarters) and annual sales (last three years) figures for the product student’s firm sells. Created business strategies by analyzing information and data related to the demand for and supply of firm’s product(s) to support student’s recommendation for the firm’s actions. Included a graphical representation of the data and information used in student’s analysis.

1

-D trends over last 3 yrs

& explained impact on industry and firm

-Last 2 qtr+3 yrs sales data

-Bus Strats by analyzng info & data rel to D & S to support recs for firm’s actions

-Incl graf of data & info used. [Yes]

Examined available, current data and information, such as pricing and the availability of substitutes, and explained how student could determine the price elasticity of demand for firm’s product. Assessed how the price elasticity of demand impacts the firm’s pricing decisions and revenue growth.

1

-Exam avail current data & info (pricing, avail substit) & explained calc of PEOD.

-Assessed how PEOD impacts pricing decis & rev growth [Yes]

Applied the concepts of variable and fixed costs to firm for informing its output decisions. Analyzed how different kinds of costs (labor, research and development, raw materials) affect the firm’s level of output.

1

-Used fixed/var cost of firm to shape output decisions.

-Explain how diff kinds of costs affects firm’s level of output [Yes]

Based on the data gathered and analysis performed student’s conclusion included:

· Business strategies, including price and non-price strategies, based on market structure to ensure the market share and potential market expansions. Also included exploration of global opportunities for student’s business in a dynamic business environment and provided recommendations.

· A recommendation for how the firm can manage its future production by synthesizing the macroeconomic and microeconomic data presented.

· Proposal for how the firm’s position within the market and among its competitors will allow it to take your recommended action.

· Recommended strategies for the firm to sustain its success going forward by evaluating the findings from demand trends, price elasticity, current stage of the business cycle, and government policies.

1

Conclusions

-Bus price/nonprice strats based on mkt struct to insure mkt share & potential mkt expansions

-inclu explor of global oppors for bus w/recommends

-Rec for how firm can manag future productn using macro/micro data

-Proposal for how firm’s position in mkt & among competitors will support recommendations

-Rec strats for firm to sustain success by eval findings frm dem trends, peod, current stage of bus cycle & gov’t policies [Yes]

Cited a minimum of three peer-reviewed references and a minimum of two government economic data sources/references. 1,050 words.

1

3 peer reviewed refs & 2 gov’t econ data sources & 1,050 words [Yes}

Total Earned

Total Available

Percent Earned

7

7

7/7

Met

Partially Met

Not Met

Comments:

0.5

OK

0.5

OK

0.5

OK

0.5

OK

0.5

OK

Total Earned

Total Available

Percent Earned

Writing Guidelines – 3 Possible Points

The paper—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements.

0.5

OK

Intellectual property is recognized with in-text citations and a reference page.

Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper.

Sentences are complete, clear, and concise.

Rules of grammar and usage are followed including spelling and punctuation

The analysis is a minimum of 1,050 words in length

3

3/3

10

Assignment Total		10	10/10
Additional comments:100% Excellent.

1