Analyzing the causes of decline in a business

Choose one of the following options:

Option 1

Preparation

Quickly think of a brand you used to buy or a store where you used to shop that no longer exists. Do any of these names ring a bell?: Blockbuster, Radio Shack, Wachovia Bank, Circuit City? Businesses like these fade from memory soon after they close as the business environment replaces them with bigger, better, or newer products, goods, or services.

What is it that causes formerly “top” businesses to fail? While every business and its circumstances are unique, the cause of failure can usually be traced to big changes in the external or internal environment.

Your Task

Research a business that financial analysts predict will be gone in the very near future. You may choose one of the following companies or research another company that business analysts think is on its way out. Note: If you select a company that is not on this list, you must provide the source for your research.

J.C. Penney

Sprint/Nextel

The Container Store

New York & Company (Retail Clothing)

Jamba Juice

Elizabeth Arden (Cosmetics)

Sears

Aeropostale

Rosetta Stone

PacSun

Based on what you find, determine:

1.In your paper, first identify the business you chose and why it was of interest to you.  Provide a brief summary of the company, what they do, when they were created, etc.

2.Then, determine whether the business is declining on account of an an external factor (i.e., shift in demographics, competition, consumer demand) or an internal factor (i.e., poor management, poor quality, lack of cost control). It may be a combination of both, in which case you should include this insight in your paper. Either way, be sure to explain in detail how this factor has negatively impacted the business and why.

3.If you discover an external factor, was there anything the company could have done to adapt?

4.If you discover an internal factor, why do you think the company didn’t address it before it got so serious?

Option 2

The assignment is as follows:

Select a product, good, or service for which you believe there is, if not perfect, close to perfect price inelasticity of demand. Refer back to course materials for clarification of what price inelasticity means.

Research the product, good, or service so that you have a general understanding of the market, customers, suppliers, and competition. Consult at least one reliable, credible source and be sure to include a citation so we can see where you got your information.

Discuss the following questions(s) with regard to the product, good, or service. Remember, you are NOT to turn in a numbered list of responses. This is a written paper, so your responses should form a cohesive set of paragraphs, with appropriate transitions, and so on.

1.Describe in 50 words or less the product, good, or service that you chose.

2.Why did you choose this product, good, or service?

3.Why do you believe the demand is inelastic with regard to price? What factors are at work here? (Hint: Think back to the external factors you read about in module 1.)

4.What, if anything, could change and make the product, good, or service price elastic?