I need an explanation for this Management question to help me study.
The major assessment in ECON625 will be a 6 to 10 page paper that analyzes the potential for introducing a new business in a location and industry of your choice. The paper will highlight opportunities, incentives, and challenges for the business using economic theory, concepts, and language that we have explored throughout this course. Regular pre-assignments will guide you through this process and will be due throughout the course. The pre-assignments are worth a total of 100 points as indicated below. The final paper is due the last week of class and is worth 200 points in addition to the pre-assignments. Assignment details and due dates for pre-assignments and for the final paper are shown below. Submit the final paper under the “Assignments” link on the BB menu at the left.
Week 1 Preparation for Paper: Selecting the Location and Industry. Points: 10
Submit one page identifying your chosen industry and geographic area. Give a brief description of the industry and the geographic area.
Week 2 Preparation for Paper: Describing the Location. Point Value: 20
Submit 1 to 2 pages identifying any factors in the geographic area that might impact demand and/or supply in the industry.
Week 3 Preparation for Paper: Identifying Relevant Variables that affect Demand and Production Forecasts. Point Value: 20
Submit 1 to 2 pages identifying variables that could be used to predict demand and production. Include at least one variable from each of the following three categories:
Week 4 Preparation for Paper: Analyzing Resources. Point Value: 20
Submit 1 to 2 pages identifying resources that are important to your industry. This can include labor (with any specific skill sets that might be required), raw materials, suppliers, environmental conditions.
Week 5 Preparation for Paper: Analyzing Market Structure. Point Value: 20
Submit 1 to 2 pages identifying the market structure that most closely approximates your chosen industry. What characteristics do you observe in the industry that support this identification? Provide evidence.
Week 6 Preparation for Paper: References. Point Value: 10
Submit your reference page.
Week 7 Final Paper: Future Business Potential. Point Value: 200 Points
Identify a city or a neighborhood within a large city (eg: “Corktown”) that you believe has potential for future business growth. Then select a product or service that you believe could be successfully introduced as a new business in this city.
Investigate the business environment of the city as well as the market structure of the business and the potential market demand for the product. Prepare a recommendation stating whether there is justification for opening a new business of this type in this city.
You must cover each of the four main categories listed on the next page, covering at least two distinct points within each category. Some possible points are listed under each category. You are not limited to the points listed under each category, but you must cover each category.
Your final paper will be 6 to 10 pages in length (not counting title page or references). The paper must be in APA format with sources clearly identified using in-text citations and a final reference page. Include an introduction and a summary. Summarize and paraphrase information from outside sources, being sure to cite those sources. There will be a substantial reduction of points if word-for-word quotations from outside sources total more than 5% of the paper. Include your own interpretation and analysis based on theory, concepts, and language that we have explored throughout the course.
Future Business Potential: Main Categories
Market Demand: Nature of the Product or Service
Is there a need for this product or service in this city? What is the evidence?
Are there similar products or substitutes available? Is it possible to observe prices of similar products? Does demand appear to be relatively elastic?
Are there related products or complements that might affect demand for this product?
Is this a necessity? Luxury? Do consumers appear to be sensitive to price changes?
If you were to estimate a demand equation, what factors would you include? Do these factors appear to be conducive to high demand?
Market Demand: Characteristics and Behaviors of Consumers
Who would be the “demanders”? Households? Individuals? Other businesses? How many of them are there?
Does the business environment in the city suggest that business will grow from a consumer perspective? What types of businesses exist (Finance, manufacturing, service, cultural)? Are any businesses entrenched there? Are new businesses/industries considering location there?
Does the social environment support a strong consumer base? Is there entertainment? Medical care? Housing? Restaurants? Shopping?
Do macroeconomic conditions suggest that the timing is right for consumers to purchase?
Market Supply: Production
Are physical resources for production available?
What labor market skill sets are needed? Are they readily available in this city? Are education and training networks in place?
Does production of the product or service depend on outside suppliers? On weather? On other uncontrollable risks? How would you minimize the risks?
Are there potential gains from economies of scale or economies of scope?
Is city infrastructure suitable for this business? Are transportation networks sufficient (labor transit, product distribution, supply acquisition)?
Does the business environment in the city suggest that business will grow from a supplier perspective? Are there business-to-business services available?
Are there government regulations or standards for this business? Is there government support? Are there financial incentives or tax breaks for businesses?
Market Structure: Choose one of the following:
Monopoly or Oligopoly: What characteristics suggest that this is a monopoly or an oligopoly? Are there barriers to entry? If so, what are they? Would you be able to overcome them? How would you strategically enter the market given the existence of the other firms?
Monopolistic Competition: What characteristics suggest that this is a monopolistically competitive market? Is product differentiation a factor? If so, what characteristic(s) might you use to differentiate your product? How would you advertise them?
Competitive Market: What characteristics suggest that this is a competitive market? Is price the major determinant of demand? Do there appear to be above-normal profits? Do you believe the price is currently high enough to cover costs? (Recall that in a competitive market, you would need to accept the current price.)
Future Business Potential: Possible Information Sources
Official city websites
Census data https://www.census.gov/data.html
Small business administration https://www.sba.gov/blogs/conducting-market-resear…
Open source government data collections https://www.data.gov/