Economics Assignment Review and Revise their Week 3 Research Analysis Incorporate week 3 this should be a total of 2800 words Assignment Content Purpose o
Economics Assignment Review and Revise their Week 3 Research Analysis Incorporate week 3 this should be a total of 2800 words
Assignment Content
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 AssignmentThis 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. RUNNING HEAD; PAYLESS SHOES ANALYSIS
Week 3
Research Analysis for Business: Payless Shoes
Name
ECO/561
March 5, 2019
Kate Stowe
1
PAYLESS SHOES ANALYSIS
2
Payless Shoes Analysis
Payless Shoes is a privately-owned footwear retailer in the US. Its headquarters are in
Kansas. However, the U.S outlets of this store are facing a threat of going out of business.
Payless operates in a market structure of perfect competition. The retailer cannot influence
market prices alone and cannot sell enough products to supply the entire market. The are many
firms like Payless in Kanas that compete against it.
According to results of a survey conducted between September 24th to October 24th, 2018
(published online) (Statista, 2018) 14.15% of Americans aged between 18-29 years shopped at
PayLess, 15.9% of Americans aged 30-49 years shopped at payless while12.8 % of Americans
aged 50-69 years shopped at PayLess. These figures summed up add up to 42.85% of the total
shoppers across all ages. This data is a direct indication that Payless commands a market share
ranging between 40-45% of the total market in the region. The top competitors against PayLess
as ranked by Owler are Target, JCPenney, Kohls, DSW Inc, Macys Inc, Walmart, BestBuy,
Brown, TJX, and Ross (Owler, 2019) in that Order.
The major barriers to entry in the American footwear market are capital requirements,
product differentiation and access to channels of distribution. To begin with, one needs a lot of
capital to venture into the shoe business, while so many aspiring competitors may have the
money, they may not be willing to risk all of it in such a business. The shoe industry calls for
diversity in production. One cannot be selling one brand or one design forever. The ability to
give the market such diverse products is a challenge to many. The other biggest challenge is
access to distribution channels. Every new business needs to have as many outlets as possible to
be able to reach the largest market base. If an enterprise can get strong and able distribution
PAYLESS SHOES ANALYSIS
3
channels then they can easily penetrate the market (Stringham, Miller, and Clark, 2015). The
need to invest a lot of money and the need to command a wide base of distribution channels may
bar so many potential competitors from entering the market hence PayLess will most likely face
less competition in the near future considering that the market is constantly increasing due to
population increase.
Regardless of everything, PayLess is on the recession phase of business. They have risen
and stabilized and made bumper profits. With the rise of their competitors, their market share is
going to be on a downhill road, the same as their sales volumes. GDP in the United States has
been on the average increase since 2016, this implies more cash flow and more purchasing
power. Unfortunately, inflation rates have been on the rise over the same, with inflation rates
starting at 1.27% in 2016, to 2.14% and to 2.54% in 2019(Statista, 2018), and unemployment
rates have significantly reduced according to the US Bureau of statistics (Bureau of Economic
Statistics, 2018).
As can be seen in the graph, there was a huge drop both in market demand and sales in
the year 2015 and a smaller drop in the year 2016 and 2017. Generally, the trend has been
downwards and the number of pairs demanded has reduced. This is the data as is depicted by
Statista online (Statista, 2018) considering this trend I would recommend PayLess shoes to start
diversifying so that if the shoe business continues going down, they wont be forced out of
business.
PAYLESS SHOES ANALYSIS
4
volume
2480
2471
2470
Millions of Pairs
2460
2450
2440
2430
2421
2420
2416
2415
2017
2018
2410
2400
2390
2380
2015
2016
Years
volume
There are no substitutes for footwear except maybe different brands of footwear that serve the
same purpose and fall under the same category in the market. The prices of shoes at PayLess are
relatively high yet they still manage to command large clientele. To determine the price elasticity
of demand I would observe and quantify the changes in sales and volumes of demand when the
price is raised by a certain percentage. The ratios of demand change to price change are a direct
indicator of elasticity.
Fixed costs are factors like rent, transport and such while variable costs are those that change
with a change in output. The cost of rent restrains the enterprise from venturing into new markets
since it implies consuming more capital in investment. Labor costs are covered by profits since
more workforce means more profits hence the cost of labor doesnt impact much on business.
PAYLESS SHOES ANALYSIS
5
Conclusion
The first step towards ensuring the success of PayLess is price control. Keeping the prices at a
level that can be reached by both the rich and the is a strategy to widen their market. Since the
market is one of perfect competition, PayLess should venture beyond Kansas and beyond the US
to compete for worldwide market share in order to improve profits.
Considering the data available on trends in prices and demands. The only thing that appears right
to is for Payless to diversify its products, probably include clothing in their enterprise so that the
business is not entirely dependent on one category of products. They must understand the current
data, trends and also predict the future based on the facts on the table.
The firm is already commanding a very large market share, it is also one of the most renown
retailers, this is favorable for their diversification since they will just need to give something
extra and new to the market that they already hold shares in.
To be able to stay ahead and on top of business, PayLess needs to conduct a self-analysis to
determine their strengths and capabilities after every short while. This will expose them to the
strengths that they can use to tap opportunities and grow positively in reputation and customer
satisfaction.
PAYLESS SHOES ANALYSIS
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REFERENCES
Bureau of Economic statistics. (2018). Principal Federal Economic Indicators. Retrieved
February 19, 2019, from Bureau Of Economic Analysis: https://www.bea.gov/
Capizzi, M. T., & Ferguson, R. (2005). Loyalty trends for the twenty-first century.
Journal of Consumer Marketing, 22(2), 72-80.
Official Guide to Government Information and Services. (2018). Data and Statistics
about the U.S. Retrieved February 20, 2019, from USA GOV: https://www.usa.gov/statistics
Owler. (2019). Trending News for Payless Shoe source and Payless Shoe source ‘s
Competitors. Retrieved February 19, 2019, from Owler:
https://www.owler.com/company/payless#competitors
Statista. (2018). Share of Americans who shopped at Payless shoes in person (not online)
in the last 12 months in 2018, by age. Retrieved February 19, 2019, from Statista:
https://www.statista.com/statistics/231495/people-who-shopped-for-shoes-at-paylessshoesource-in-the-last-3-months-usa/
Stringham, E. P., Miller, J. K., & Clark, J. R. (2015). Overcoming barriers to entry in an
established industry: Tesla Motors. California Management Review, 85-103.
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