Research Paper: Satisfy the Requirements of the Upcoming Final

Pages: 5 (1667 words)  ·  Bibliography Sources: 7  ·  Level: Master's  ·  Topic: Business  ·  Buy This Paper

¶ … satisfy the requirements of the upcoming Final Project Report assignment for this Managerial Economics course, it is first necessary to employ one of the fundamental techniques used by executives seeking to shepherd a complex enterprise to growth and viability: A comprehensively thorough planning phase. By developing a detailed outline of the Final Project Report's organizational structure, subject matter, and rhetorical strategies, a close reading by the module teaching team can then be undertaken to proactively obtain constructive criticism and points of improvement. The following outline is intended to provide a clear summarization of the Final Project Report's intended objectives and logical arrangement, with a focus on the revealing a level of mastery in the application of several macroeconomic and microeconomic concepts emphasized throughout the Managerial Economics course. The Final Project Report will begin with an introduction to Staples Inc., including a review of the firm's historical place in the market, adaptive strategies used to expand, and current policies used to retain and increase market share. This introductory portion will then be followed by an analysis of Staples from both a macroeconomic view, with an emphasis on potential mergers between primary competitors and other opportunities and threats, as well as a microeconomic view, with an emphasis on Staples' preferred method of profit maximization, pricing points, and demand conditions (Salvatore, 2006). The firm's approach to integrating risk management theory within its own operations will also be examined, with the eventual goal being the formation of a reasonable, evidence-based managerial strategy. This strategy will be based on several specific macroeconomic, microeconomic, and organizational-specific conditions to address the areas of production, pricing, and resource utilization.

What your company is going to be in the final report? (Staples Inc.)

As modern computing technology continues to evolve and empower ordinary citizens, many aspects of business ownership which were once reserved for the wealthy and powerful have been made available for ambitious small business owners to exploit. Fax machines, Xerox copiers, laser printers, laptops, smart phones and other essentials of modern commerce were all once luxury items reserved for large corporations, but today retail business supply outlets like Staples have improved public access to these critical business tools. Founded in 1985 by a pair of retail rivals, Leo Kahn and Thomas G. Stemberg, Staples Inc. has since flourished throughout the domestic and global marketplace by positioning itself as the primary public outlet for the purchase of office supplies.

In over two decades of operation, Staples has established a positive public image defined by delivering superior customer service and practicing exemplary corporate citizenship in accordance with the policy of Staples Soul. According to the 2005 Staples Corporate Responsibility Report, which is issued to key stakeholders like major investors, employees, and shareholders alike, Staples Soul reflects the company's commitment to corporate responsibility because this philosophy links moral values with global business strategies (Sargent, 2005). Examples of Staples Soul initiatives in action include the company's longtime commitment to offering store credit to customers who recycle their depleted printer ink cartridges, charity-based community outreach programs, and a sterling record of environmental responsibility. The company's clearly stated, genuine commitment to public service and philanthropy, as well as quality products and superior customer service, has vaulted Staples to the head of the pack in terms of market share within the thriving office supply market. Two main competitors have emerged, however, in the form of Office Depot and OfficeMax, but with Staples already established as the industry standard both firms are simply cannibalizing each other's consumer base.

As a customer who frequents Staples to stock up on school supplies and other useful items in today's technological age, I have found that the company's affirmations of corporate citizenship appear to be genuine, and from a managerial economics standpoint this strategy would appear to be productive. An example of their Staples Soul philosophy working in tangible a way that I can appreciate firsthand can be found in their successful "Staples for Students" program, an initiative which provides incentive for customers to donate supplies and funds to struggling students in their local school system. According to a press release recently published the company, in 2012 Staples donated $125,000 worth of school supplies to the program, and since 2008, Staples for Students has raised more than $2.5 million for young Americans (Staples, Inc., 2012). In my capacity as the economic manager of Staples Inc., and thus a key stakeholder in the company's operation, one crucial component of my duties would be maximizing the utility of resources like donation drives (Baye, 2010). Thus, it is vital to consider positive feedback in the form of customer surveys, and interaction with employees, because in the rare event that a multinational corporation adheres to their policies of corporate citizenship their efforts should be recognized and rewarded by the marketplace.

As a publically held company, other primary stakeholders in the future of Staples include the thousands of individuals who have invested their hard-earned capital in the company's stock. Stockholders exert a tremendous amount of influence on the direction of a company, and due to Staples' consummate reputation as a responsible corporate citizen, shares of Staples stock have maintained a relatively healthy track record considering the external financial circumstances. The army of employees who man Staples stores and provide the first level of customer service represent yet another group of concerned stakeholders, and throughout the company's 27 years of existence Staples has earned the recognition of labor groups both domestically and abroad.

What is your strategy about market structure?

Measures of oligopoly?

How concentrated is your market?

These three distinct, yet intricately interconnected, questions will be answered in conjunction, as the recent news of a potential merger between Staples chief competitors, Office Depot and OfficeMax, which currently rank as the second and third largest office supply chains in the world respectively, has rocked this traditionally stable market of late. The eventual combination of Staples two most serious threats would require a radical adjustment to the firm's managerial economics policy. The office supply industry will have effectively become an oligopoly, which is defined as a large market dominated by a relatively small number of distinct firms (Hirschey, 2009). To analyze the presence of competition for Staples in the event of a historic merger, and the potential strategic adjustments it would be informative to apply Michael Porter's Five Forces of Analysis model (2008), because this framework is essential for reconciling the risks posed by external market conditions and internal strategic alignment.

To address the potential oligopoly that may be formed if Office Depot and OfficeMax merge to form a super-competitor to Staples, it will also be useful to examine alternative theories, such as the theory of sales maximization as put forth by William J. Baumol. This economic maxim suggests that, within oligopolistic markets, a firm can set its minimum profit constraint very competitively in order to maximize its total sales and revenue (Salvatore, 2012). Under the theory of sales maximization, maximum revenue is attained through constant production and low-priced goods and services, with investment in advertising used to maintain a steadily increasing rate of demand. According to Baumol, an oligopoly is in equilibrium when the price and output are calibrated precisely to ensure realized profit is equal to the minimum expected profit (Sandmeyer, 1964). Much of the Final Project Report will be spent applying the theoretical foundations of Porter and Baumol to Staples' current situation, in an attempt to mitigate the consequences of the potentially impenetrable oligopoly formed by its two main competitors.

Capital Structure and Budgeting

Risk management

Pricing

These three issues will be addressed through an analytical literature review, by focusing on financial reports published in respected investment advisement outlets such as the Economist, the Wall Street Journal, and Investor's Business Daily. By synthesizing the most recent statements to stockholder's, analyst's opinions,… [END OF PREVIEW]

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