Company Economic Analysis

The first paper is on Supply and Demand. Guidelines are as follows:

Company: Tesla Motors – supply and demand analysis. Using your company selection (Tesla Motors), complete the following main elements:

1. Identify two non-price variables such as customer income or demographics, advertising, prices charged for related goods or services, or interest rates that affect the demand for the products or services you identified in your selection.

2. How does each of the variables affect the quantity demanded?

3. Identify two non-price variables, such as wages paid to workers, energy cost, price of key inputs, or technology, that affect the supply of the products or services you identified in your selection.

4. How does each of the variables affect the quantity supplied?

5. Based on your analysis, describe the current market equilibrium for the industry.

6. Based on your analysis of the non-price demand and supply factors, what external conditions should managers be monitoring to predict future changes?

Economic Analysis Paper Two: Market Analysis

Your second analysis paper is the market analysis. Using your company selection, complete the following main elements:

1.    Identify the market structure (perfect competition, monopolistic competition, oligopoly, or monopoly) that best characterizes the company you are evaluating.

2.    Include information on the type of market structure you select, such as number of firms in the industry, product homogeneity, barriers to entry, use of advertising, and so forth.

3.    Answer the following questions with respect to the industry:

o    How does the industry structure affect the strategies used by the company you are evaluating?

o    To what extent does market structure explain the financial performance of your company? For example, is it able to earn higher-than-average profits because of barriers to entry? Is it able to use advertising or product differentiation to maintain its profits above those of competitors?

4.    Collect data for the past three to five years on two company-specific variables, such as profits, sales, or earnings per share, that are indicative of company performance. Present the data in a table or graph you create yourself. Do not copy and paste data from other websites, but use the available data to create your own table or graph.

Economic Analysis Paper Three: Macroeconomic Variables

Your third analysis paper is about the macroeconomic variables affecting firm or industry performance. Using your company selection, complete the following main elements:

1.    Identify three to five macroeconomic variables that affect the demand for and/or supply of the products or services produced by your company or industry. For example, if you are analyzing a consumer product, such as television sets or computers, you might include consumer income, energy prices, wage rates, and interest rates.

2.    Find historical data (three to five years) for these variables for one of the countries in which your company or industry has a major presence. Develop your own graphs and/or tables showing the data, and discuss how the variables have changed over the period you are examining. Do not copy and paste data from other websites, but use the available data to create your own table or graph.

3.    Compare changes in the macroeconomic variables to changes in the company data you collected in analysis papers one and two. What observations can you make about the effects of movements in macroeconomic variables on the company’s performance?

Economic Analysis Paper Four: Short-Term Company Outlook

Your fourth analysis paper is the short-term company outlook. Using your company selection, complete the following main elements:

1.    Using the relationships between macro variables and company/industry performance and the short-term outlook for macro variables from analysis paper three, develop a short-term (about one year) outlook for your company that is shown as an extension to the historical data tables or graphs you developed in previous papers.

2.    Answer the following questions on the outlook:

o    Is the macro economy helping to promote growth in your industry?

o    Are current government policies likely to result in slower or negative growth in demand?

o    Will costs be adversely affected or helped by government policies?

3.    Conclude with an assessment of how current macro policies are affecting your industry or company and any steps companies within the industry can take to benefit from or mitigate the effects of the policies.