Economics project 1

Overview: The final project for this course asks you to select and analyze a case study that presents an economic problem facing a company that operates within a particular market structure.

You may encounter additional companies\case studies within your ECO 500 Case Study CoursePack. However, please disregard them and ONLY focus on the following:

 American Airlines

 Heinz

 Microsoft

The American Airlines case addresses how a company manages revenue, the Microsoft case looks at how a company maintains market power, and the Heinz case exemplifies how a company deals with competition. All three cases involve a company’s executives and managers looking for ways to increase profits. The parent companies of Heinz and Beech-Nut entered into a merger agreement, which was blocked by the Federal Trade Commission. American Airlines attempted to navigate the mind-numbing pricing structure that created the risk of being considered predatory. Microsoft’s anticompetitive actions in the browser market resulted in legal problems.

For the final project, you will select one of these case studies and counsel the CEO on an alternate strategy. Imagine that the CEO has tasked you, the corporate economist, with researching the issue and reporting on a possible plan of action. To begin this process, you must clearly understand the problem at hand and be able to identify the root cause. Selecting the appropriate economic model to drive your analysis will be important in guiding your research.

Journals are private between the student and the instructor. Review this tutorial for information on creating a Blackboard journal entry.

Prompt: Compose a preliminary problem statement in which you identify the company you have selected to research and describe the problem at hand. In this statement, you should:

 Identify and articulate the problem as presented in the case study, describing any relevant contextual factors that may influence it.

 Use your background knowledge in economics and your critical thinking skills to deduce possible root cause(s) of the problem

 Identify the appropriate economic model(s) that should drive the analysis of this problem. Is this a demand-side problem? Or is it a supply-side problem?

In business scenarios such as this one, problem statements are needed to describe the problem in a concise way. These statements provide a clear and focused analysis of objectives and offer a method that will be followed to find possible solutions. 

You may find it useful to gather information about the organization or company’s current initiatives and processes, general policies, and stated goals. Information can generally be found in the organization’s main website, annual report and mission statement, and articles authored by the company or by outside analysts. Additionally, you might consider accessing relevant company and market information on the following sites:

 U.S. Bureau of Labor Statistics

This is a good source for costs information (i.e., producer price index [PPI]), labor market conditions (i.e., employment and unemployment by industry), and prices of various goods (i.e., consumer price index [CPI]).

 Electronic Data Gathering, Analysis, and Retrieval (EDGAR)

This is the database compiled by the U.S. Securities and Exchange Commission (SEC).

 U.S. Census Bureau This site houses useful business and industry data programs. 

Rubric:

Guidelines for Submission: Your journal response should be submitted as a 3 pages Microsoft Word document with double spacing, 12-point Times New Roman font, and one-inch margins. You should use current APA style guidelines for your citations and reference list. Note that at least three outside information sources are required for this assignment (these may include both the case study and the company website itself).