Long-Term Investment Decisions ECO 550 Managerial Economics and Globalization

Microwavable frozen meals like Healthy Choice and Lean Cuisine are an easy option and offer easy diet solution for busy people. This is why they are the two leading competitors in the low-calorie frozen, microwavablefood industry. Although they have several similar factors in common such as product type, nutritional value, and price; both Lean Cuisine and Healthy Choice has suffered a drop in sales as the frozen single-serve meal category continues to contract. According to Watrous (2014), ConAgra, who produces HealthyChoice is “aiming to drive more profitable purchases from baby boomers, who represent more than 60% the category’s volume”. She states they are looking to a more effective marketing approach which will include competitive pricing as it will figure largely into their retail strategy. Nestle who produces Lean Cuisine has also see profits fall from the contraction of the low-calorie frozen, microwavable food industry. They seekimprovement in Lean Cuisine, by offer new products to the line. The Lean Cuisine has already start producing a selling new line extension that are made with all-natural ingredients and no preservatives and Salad Additions (Gelski, 2014). According to Gelski (2014), since “organic growth was somewhat muted, which reflected lower pricing by their markets, and they leveraged softer input costs to meet the expectations of today’s more value-conscious consumers. This, combined with substantially increased investment behind their brands, delivered stronger volume growth momentum, whilst at the same time they were able to improve the operating margin”. The low-calorie frozen, microwavable food industry has a monopolistic market structure. This industry is monopolistic because they offer products with unique qualities and they can charge a different price that reflects this uniqueness. Since this industry is contracting, they should remain competitive by continuously improving their processes and strategic planning. The low-calorie frozen, microwavable food industry can remain competitive by using the product differentiation strategy and competing on their capabilities and endorsements. Lean Cuisine already has an endorsement with Jenny Craig. They can create a product line specifically for Jenny Craig and set their own optimal price for this line. With product differentiation this industry can command a price premium simply because of their product image which is associated with the success of their brand (McGuigan, Moyer, and Harris, 2014, pg. 336) 2. Examine the major effects that govern...

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