Assignment 3: Long Term Investment Decisions Due Week 716861

Assignment 3 Long Term Investment Decisionsdue Week 9 And Worth 300 P

Assume that the low-calorie frozen, microwavable food company from Assignments 1 and 2 wants to expand, and has to make some long-term capital budgeting decisions. The company is currently facing increases in the costs of major ingredients. Use the Internet and Strayer databases to research government policies and regulation. Write a six to eight (6-8) page paper in which you:

1. Outline a plan that managers in the low-calorie, frozen microwaveable food company could follow in anticipation of raising prices when selecting pricing strategies for making their products' response to a change in price less elastic. Provide a rationale for your response.

2. Examine the major effects that government policies have on production and employment. Predict the potential effects that government policies could have on your company.

3. Determine whether or not government regulation to ensure fairness in the low-calorie, frozen microwavable food industry is needed. Cite the major reasons for government involvement in a market economy. Provide two (2) examples of government involvement in a similar market economy to support your response.

4. Examine the major complexities that would arise under expansion via capital projects. Propose key actions that the company could take in order to prevent or address these complexities.

5. Suggest the substantive manner in which the company could create a convergence between the interests of stockholders and managers. Indicate the most likely impact to profitability of such a convergence. Provide two (2) examples of instances that support your response.

6. Use at least five (5) quality academic resources in this assignment. Note: Wikipedia does not qualify as an academic resource. Your assignment must follow these formatting requirements:

• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format.
• Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date.

The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

• Propose how differences in demand and elasticity lead managers to develop various pricing strategies.
• Analyze the economic impact of contracting, governance and organizational form within organizations.
• Use technology and information resources to research issues in managerial economics and globalization.
• Write clearly and concisely about managerial economics and globalization using proper writing mechanics.

Answer the following questions in a Word document. Each should require approximately 2 paragraphs. Use outside references where appropriate in citing your response.

1. Describe in detail how you would select a 4% systematic sample of the adults in a nearby large city in order to complete a survey about a political issue.
2. Explain the difference between probability and statistics. Include an illustration.

Paper For Above instruction

The strategic decision-making process in the context of long-term investment requires a comprehensive understanding of market dynamics, government policies, and organizational complexities. For the company specializing in low-calorie, frozen microwaveable foods, proactive planning is essential to navigate increasing ingredient costs and capitalize on market opportunities through intelligent pricing strategies. Additionally, understanding the influence of government regulation on production, employment, and fairness is critical to shaping sustainable business practices.

Pricing Strategies for Less Elastic Demand

To prepare for potential price increases, managerial strategies should focus on enhancing product differentiation and customer loyalty to reduce price elasticity of demand. Implementing a value-based pricing approach that emphasizes health benefits, convenience, and unique product features can help shift consumer preferences and lessen sensitivity to price changes. Furthermore, deploying targeted promotional campaigns during periods of cost inflation can communicate added value, discouraging consumers from decreasing consumption when prices rise. These strategies foster a perception of higher value, enabling the company to raise prices with minimal adverse effects on sales volume.

Rationale for this approach hinges on the principle that by increasing product differentiation and consumer engagement, the company can establish a less elastic demand curve. When consumers perceive a product as unique or vital—such as healthy, low-calorie foods—they are more willing to pay premium prices. This approach aligns with the concept of branding and differentiation as tools to shift demand elasticity, making price adjustments more manageable without significant loss of sales (Kotler & Keller, 2016).

Government Policies and Their Effects

Government policies significantly impact production and employment through regulation, taxation, and subsidy programs. Policies aimed at environmental standards can impose additional costs on manufacturing processes, potentially increasing operational expenses. Employment laws, minimum wages, and labor protections influence staffing costs and workforce availability, sometimes leading to shifts in labor demand. For the food industry, regulations concerning food safety, labeling, and advertising directly influence operational procedures and market access. These policies can stimulate or hinder growth based on their strictness and compliance costs.

Predicting the impact of government policies on the low-calorie food company involves analyzing potential regulatory shifts such as stricter health standards or trade tariffs. For example, stricter labeling laws could increase costs but also enhance consumer trust, potentially boosting sales. Conversely, unfavorable trade policies might elevate ingredient prices, adding pressure to profit margins. Thus, the company must stay agile, adapting to policy changes to minimize disruptions and leverage opportunities.

Need for Regulation and Market Fairness

Regulation to ensure fairness in the low-calorie, frozen food industry is essential to prevent monopolistic practices, ensure product safety, and protect consumer interests. Fair marketplace practices foster healthy competition, stimulate innovation, and protect small or new entrants that might otherwise be unfairly disadvantaged. Government intervention through agencies like the Food and Drug Administration (FDA) ensures compliance with safety standards, maintaining consumer trust and market integrity.

Two examples of government involvement in similar markets include pharmaceutical regulation under the FDA in the United States, which ensures drug safety and efficacy, and the regulation of organic food standards by the USDA. Both instances demonstrate the role of government in safeguarding public health and ensuring fair competition, illustrating the importance of such interventions in maintaining ethical and competitive markets (Nelson, 2019).

Complexities of Expansion through Capital Projects

Expanding via capital projects introduces complexities such as significant capital expenditure, project management challenges, and risks related to market acceptance. Financial risks include potential overruns and delays in project completion. Management must also navigate regulatory approvals, supply chain disruptions, and integration of new facilities or technology. To counter these issues, the company should conduct rigorous feasibility studies, develop detailed project timelines, and establish contingency plans. Engaging experienced project managers and maintaining clear communication channels are critical to address potential hurdles actively.

Additionally, fostering strong stakeholder engagement and continuously monitoring project progress can help identify issues early, enabling timely corrective actions. Investing in flexible infrastructure that can adapt to changing market conditions will also mitigate operational risks associated with expansion.

Convergence of Interests: Stockholders and Managers

Aligning the interests of stockholders and managers involves implementing incentive structures such as stock options, performance-based bonuses, or profit-sharing plans. These mechanisms motivate managers to prioritize company growth and profitability, aligning their goals with shareholder value. Effective governance policies, transparency, and accountability measures further facilitate this convergence. When managers are incentivized to focus on increasing stock performance, profitability tends to improve due to shared objectives.

For example, performance incentives linked to revenue growth can motivate managers to innovate and expand product lines (Jensen & Meckling, 1976). Conversely, profit-sharing programs encourage cost efficiency and productivity. Such alignment has been shown to increase company valuation and long-term profitability, benefiting both shareholders and management (Fama & Jensen, 1983).

References

• Fama, E. F., & Jensen, M. C. (1983). Separation of Ownership and Control. Journal of Law and Economics, 26(2), 301-325.
• Jensen, M. C., & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 3(4), 305-360.
• Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.). Pearson.
• Nelson, P. (2019). Regulatory Agencies and Market Fairness: Case Studies in Food and Drug Policy. Public Policy Review, 45(3), 144-157.
• Strayer University Library Database. (2023). Government policies and industry regulation reports.
• U.S. Food and Drug Administration. (2022). Food safety and labeling regulations. https://www.fda.gov
• United States Department of Agriculture. (2021). Organic standards and certification. https://www.usda.gov
• World Trade Organization. (2020). Trade policies and regulatory practices. https://www.wto.org
• Yates, J. (2018). Managing Complexity in Capital Expansion Projects. Project Management Journal, 49(5), 22-35.
• Zimmerman, J. L. (2019). Financial Statement Analysis and Security Valuation. McGraw-Hill.