Company: Starbucks Corporation
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Purpose of Assignment
The purpose of this assignment is the creation of a research analysis. Every day, consumers make millions of decisions that impact the marketplace and influence firms' decisions. Firms use economic concepts, models, and other "tools" of economics to help determine pricing, output, and profit maximization. As an MBA student of economics, you can apply the "tools" of economics to microeconomic and macroeconomic data to create recommendations for how firms can maximize revenue, profit and market share.
Scenario: Imagine you are a business consultant to Starbucks Corp. You have been asked to analyze, advise, and create recommendations on how the firm can ensure its future success in its current market.
Prepare a minimum 1,050-word analysis of economic data and business data to explain how the core economic principles impact the sustainability of the firm and what actions the firm can take to ensure success.
Address the following:
- Identify the market structure your chosen firm operates in, analyze your chosen firm's current market share, and identify the firm's local/global competitors. Analyze the barriers to entry in this market to illustrate the potential for new competition and its impact on your firm's future in the market. Hints: Be sure you review the barriers to entry discussed in the course text.
- Identify and explain 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." Note: A requirement of the Week 1 Influence of Economics on Household Decision Making report was to gather data on the CPI, GDP, and interest rates, so you should consider reviewing the feedback you received on the Week 1 report.
- Evaluate trends in demand over last three years and explain their impact on the industry and the firm. Include quarterly (last two quarters) and annual sales (last three years) figures for the product your firm sells. Create business strategies by analyzing information and data related to the demand for and supply of your firm's product(s) to support your recommendation for the firm's actions. Remember to include a graphical representation of the data and information used in your analysis.
- Examine available, current data and information, such as pricing and the availability of substitutes, and explain how you could determine the price elasticity of demand for your firm's product. Assess how the price elasticity of demand impacts the firm's pricing decisions and revenue growth.
- Apply the concepts of variable and fixed costs to your firm for informing its output decisions. For instance, analyze how different kinds of costs (labor, research and development, raw materials) affect the firm's level of output.
- 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 policies.
Cite a minimum of three peer-reviewed references and a minimum of two government economic data sources/references.
Format your assignment consistent with APA guidelines.