In your final project, you will analyze an investment opportunity applying key components of advanced microeconomics theories to typical business decisions. You will assume the role of an entrepreneur, and you will conduct an analysis focusing on an investment opportunity of your choice. In your analysis you will carefully evaluate key factors influencing the demand for the product, cost and supply issues, the role of market structure, and competitive analysis on firm strategy.You will also analyze the effects of government regulations and market intervention on potential profitability, and you will use price and non-price strategies to support product introduction. You will then evaluate the potential financial viability of the proposed new product using approximate figures and determine whether or not to recommend investing in the development and commercialization of the investment opportunity to your business partners.
In task 7-2 you will evaluate the market structure and influences on firm strategies and profitability for the investment opportunity chosen for your final project.You will also evaluate the effects of government regulation and intervention that may affect your business. For example, this is where you would discuss how well the market operates and include examples of aspects market performance specific to your selection.Is it efficient?Does it produce good outcomes?Why or one why not?
In this milestone, you will submit a 3-5 page paper that includes the following:
1. Market Structure:
a. Market Competition: What is the existing and potential market competition? How do these companies affect the firm's strategies and profitability? This is where you would discuss the type of competitors, number of competitors, and barriers to entry.
b. Firm Strategies: What are potential price and non-price strategies that the firm might use and what are their relationships to the market structure? For example, discuss a strategy that would support the success of your product. Depending on how the industry is structured you might discuss how it is consistent with the market structure. Perhaps you would address how it is different. Once you address this, you would discuss how your choice provides an advantage in the market.
2. Effects of Regulation and Intervention:
a. Policies: Identify policies or regulations at the local, state, or national level that could potentially affect your business. What are the reasons for these policies or regulations?
b. Effects of Intervention: How do these policies or regulations affect your ability to compete and profitably operate in your business? Include examples specific to aspects of market performance to support your conclusions. For example, some forms of regulation, such as patent protection, may afford more profit opportunities while others, such as environmental regulations, may add to your costs.