Signature Assignment: Challenges of Expansion to a Foreign Location

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timer Asked: Jun 28th, 2018
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Question description

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.

Tutor Answer

ephykam
School: University of Maryland

check_circle ephykam marked this question as complete.

Years
Real GDP (In Billions dollars)
Consumer Price Index
Unemployment Rate
Population growth(million)
GDP per capita (USD)
Imports in (Billion US Dollars)
Sales growth

2013
9,694
2.60%
4.10%
1,361
7,124
1,950

2014
10,480
2.0%
4.10%
1,368
7,662
1,959

2015
10,925
1.40%
4.10%
1,373
7,954
1,680

2016
11,212
2.0%
4.0%
1,380
8,109
1,588

2014
10,480
1,368
7,662
1,959

Actual
2015
10,925
1,373
7,954
1,680

2016
11,212
1,380
8,109
1,588

Years
2019
2020
Under Armour Inc. Forecasted Sale Growth(in thousand
200 Units) 210

2021
235

2022
250

Years
Real GDP (In Billions dollars)
Population growth(million)
GDP per capita (USD)
Import growth (Billion Dollars)

2013
9,694
1,361
7,124
1,950

Imports in Billion US Dollars

AMOUNTS IN BILLION USDS

2,500

2,000

1,950

1,959
1,844
1,680

1,588

1,500

1,000

500

2013

2014

2015
YEARS

2016

2017

2017
12,241
1.6%
3.9%
1,390
8,806
1,844

2017
12,241
1,390
8,806
1,844

2018
12,658
1,395
9,074
1,629

2023
268

2024
285

Forecast
2,019
13,241
1,402
9,455
1,571

2025
304

Percentage
Increase
43%
4%
38%
-22%

2,020
13,823
1,409
9,837
1,513

2026
320

2027
339

2028
357

Growth rate

78%

Under Armour Inc. 10-Years Forecasted Sale Growth in
China
400
350

320
304
285

UNITS IN THOUSANDS

300

268
250
235

250
200

210

200
150
100
50
0
2019

2020

2021

2022

2023
YEARS

2024

2025

2026

YEARS

GDP per capita (USD)
10,000

AMOUNTS IN BILLION USDS

9,000
8,000

7,662

7,954

8,109

2015

2016

7,124

7,000
6,000
5,000
4,000
3,000
2,000
1,000
2013

2014

YEARS

d Sale Growth in

Unemployment Rate
357

339
320

AMOUNTS IN BILLION USDS

4.15%
4.10%

4.10%

2013

2014

4.10%

4.10%
4.05%
4.00%
3.95%
3.90%
3.85%
3.80%
YEARS

2026

2027

2028

Consumer Price Index
3.00%
8,806

AMOUNTS IN BILLION USDS

2.60%
2.50%
2.0%

2.0%

2.00%
1.40%

1.50%

1.00%

0.50%

0.00%
2013

2017

2014

2015
YEARS

ployment Rate
4.10%

4.0%

3.9%

2015
YEARS

2016

2017

2016

2.0%
1.6%

2016

2017


BUSINESS RESEARCH ANALYSIS

1

Research Analysis for Business
Octavia Paramore
University of Phoenix
ECO/561
June 11, 2018

BUSINESS RESEARCH ANALYSIS

2

Research Analysis for Business
Often, the consumer makes various decisions that influence the entire market as well as
the enterprise's decisions. Thus, to enhance the smooth operation of business, frequent collection
and analysis of market information is subtle in fostering the capacity of making informed
decisions that heighten the capacity of the firm in maximizing the enterprise proceeds. Besides,
market study promotes the profitability of a company, intensify the capacity to develop informed
strategies essential in driving sales and subsequent growth of company’s market share. Goodwin
and Wright postulate that assessment of enterprise economic elements provides vital idea used
by the management to enhance the competitiveness of a company product or service the rivals’
items (2014). In most cases, enterprises utilize the developed insight into the product pricing
strategy, the promotion of brand and in discounting techniques. Research analysis for business
heightens the capacity for making informed recommendations aimed at maximizing returns,
boosting profitability and a corresponding increase in the market share.
Under Armour Company Background
Founded in the year 1996, Under Armour is an American enterprise manufacturing
sportswear, casual apparel, and foot ware. The company has its headquarters in Baltimore,
Maryland U.S, operating in the American apparel industry.
Under Armour Inc. Market Organization
Under Armour operates in a monopolistic trade arrangement based on the market
characteristic, for instance, the American apparel market depicts a high number of companies
operating in the industry. Besides, the presence of a high number of buyers and sellers in the
apparel market depict a trait of a monopolistic market also marked by a relatively low entry cost
as well as exit. Product differentiation is another characteristic of the apparel market an aspect

BUSINESS RESEARCH ANALYSIS

3

that foster the capacity of enterprises setting fees focusing on maximizing the profits (Bertoletti
& Etro, 2017). Currently, Under Armour operates 217 factory house and 80 brand house stores in
the American Market as compared to the close competitors, Nike and Adidas.
The barrier to Entry and Potential new Competition for Under Armour Enterprise
Economies of measures form the primary obstacles to entry in the fashion market, which
entails the reduction of the unit costs due to increment in the products in a market or the shifting
in consumer preference toward a specific fashion. Often, clients change the preference in the
advent of a new fashion making the industry highly dynamic posing an obstacle to an entry in the
market. Product differentiation is the second hurdle to the entry in the apparel industry. In most
cases, the existing retail stores have an advantage of product identification as well as customer
loyalty that hinder new entries in the market. Nonetheless, Under Armour Inc. faces a high
potential for new competition from new apparel retailers entering the market future due to the
conducive business environment in the industry. Notably, starting up an apparel store is
inexpensive enhancing the capacity of any perform to venture into the market either as a
wholesaler or even a retailer operating a small boutique an aspect that would increase the
competition in the market.
Trends in the Current Macroeconomic Indicators
Feuerriegel and Gordon (2018) state that macroeconomic indicators depict the state and
the efficiency of an economy in a country, revealed by various attributes such as the number of
employees on a non-agricultural sector, trades sales, industrial manufacturing, and individual
income.

BUSINESS RESEARCH ANALYSIS

4

Current Stage of Under Armor Business Cycle
Under Armour sales trends for the last five years reveals that the company is in the
recession also referred to as the contraction stage of the business cycle. This is because the sales
depicted a significant growth from the years 2013 to 2016 at 3.7 billion US dollar, 4.1 billion US
dollars, 5 billion US dollars and 5.5 billion US dollar respectively but recorded a decline in sale
in the 2017 to 4.4 billion dollars (Statista, 2018). The contraction stage occurs when a business
sale depicts a slow down following a peak on the cycle (Eaton, Kortum, Neiman, & Romalis,
2016). For instance, Under Armour sales depicted a peak in the year 2016 depicted the highest
sales followed by a slowdown in the year 2017.
Real gross domestic product (GDP)
The real gross domestic product in the last three the years depicted $16471.5, $16716.2
and $17032.7 billion US dollars for the years 2015, 2016 and 2017 respectively (Fred Economic
Data, 2017). The real gross domestic product depicts an increasing trend over the last three years,
which indicate that the country is having an increasing price rise leading to a corresponding
increment in the fees of products. As a result, the rising charges lead to the decline of the sales
culminating in enterprises experience the contraction stage.
Rising Fees As Measured By the Consumer Price Index (CPI)
For the last three years, the average CPI has increased from 236.99, 240.01, and 244.89
for the years 2015, 2016 and 2017 respectively (Fred Economic Data, 2017). This marks an
increase in the expenses in th...

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Anonymous
Outstanding Job!!!!

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