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Managerial Economics and Globalization Eco 550

In: Business and Management

Submitted By kekawinner
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JONAH ELEKWACHI
SU200002162
ECO- 550 MANAGERIAL ECONOMICS AND GLOBALIZATION
INSTRUCTOR: PROF DR.AHMED MOHAMED
ASSIGNMENT #2.
DATE: 03/09/2014.

* Briefly describe the details of the fictitious business that you created for this assignment.

Urbanaz Inc manufactures aluminum roofing sheets. The company has been in business for over 10 years and during this time have established itself as a high quality manufacturer of roofing sheets, even though this company only appeals to a small fraction of the roofing sheet industry, they had been able to maintain a 22% profit margin. Due to the failing economy which brought about the decline in building, Urbanaz’s profit margin dropped below the break-even point, The Company is also facing a legal suit with the state government which the outcome is unlikely going to favor them. So they are faced with options to either re-strategize the company or shutdown.

* Assess the current environmental scan factors that are relevant to the decision making process. Determine the factors that will have the greatest impact on plant operations and management’s decision to continue or discontinue operations.

Environmental scanning involves a process of gathering, analyzing, and dispensing information for tactical or strategic purposes. The Company’s macro environment can be expressed in terms of the following factors;

Social
Technological
Economic
Political

When considering whether or not to continue operations, there are several factors to consider. First is to perform a market analysis to determine whether or not continuing operations is really feasible. For example, Aluminum roofing sheets may have been a product whose time has come and gone. Determining whether or not there is still a market for this product is the first step. Next would be to evaluate how manufacturing costs could be cut...

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